Australian Treasurer Josh Frydenberg has pledged measures to ease Australia’s rising cost-of-living in Tuesday’s federal budget that don’t add unnecessary upward pressures on inflation and interest rates to be set by the Reserve Bank.
Frydenberg indicated that the government’s targeted measures will be “temporary and proportionate,” as has been the government’s “fiscal stimulus” during the worst of the pandemic through its Low and Middle Income Offset—a tax break worth $1,080 (US$811.73) paid to about 10 million workers as they made their tax return. He did not say whether the budget will extend that temporary tax break.
“Inflation today in Australia is at 3.5 percent, in the United States it’s 7.9 percent, and in the United Kingdom and in Canada and other nations, it’s higher than it is here in Australia,” Frydenberg told Sky News on Sunday of the government’s balancing act of “not wanting to overheat the economy” through excessive stimulus measures.
“We’ve seen downward pressure on electricity prices as a result of policies we’ve put in place, so they’ve come down by about 10 percent in the last few years, they had doubled under Labor.”
The treasurer added that there will also be a material improvement to the budget bottom line, which he referred to as a “budget repair job in action.”
“That’s the fiscal dividend we are getting to the bottom line from having a strong economy,” Frydenberg told the Nine Network on Sunday.
At the forefront of many people’s concerns are international fuel prices, which Frydenberg said were already under pressure from supply chain issues during the pandemic that have now been “exacerbated” by the Ukraine war.
The treasurer did not reveal whether the budget relief will include a cut to the 44-cents-a-litre fuel excise, pushing back on suggestions from Nine Network host Chris Uhlmann that the budget was to “buy” voters as the Federal election looms.
Meanwhile, the government has announced a $44 million (US$33.07 million) program that provides $10,000 for employers who take on seniors with a disability.
Prime Minister Scott Morrison on Tuesday also introduced $365.3 million (US$274.56) to support an extra 35,000 apprentices and trainees get training through wage subsidies.
“These programs deliver certainty for business so they can go and hire another apprentice chef, another apprentice hairdresser, another apprentice plumber. It is about getting Australians skilled and into jobs right now,” he said in a statement.
Despite the national deficit spiralling due to pandemic measures, Frydenberg said he remained confident in Australia’s financial situation as the final budget outcome for 2020-21 was $80 billion (US$60.13) better than what he had predicted.
“Why? Because more people were in jobs, fewer people were on welfare, and that boosted revenue and also saw less expenditure on welfare payments. That’s the secret sauce for a strong economy,” he told the ABC.