Finding Savings in Budget Becoming More Challenging, According to Labor

Finance Minister Katy Gallagher has hinted at increased spending in the upcoming federal budget as economists caution against going overboard.

The Albanese administration is set to reveal its third budget in less than two weeks, with experts advising prudence in expenditure to avoid inflationary risks.

Senator Gallagher mentioned that the government plans to achieve $1 billion (US$660 million) in savings on consultants and contractors, although this is proving to be more challenging.

When asked if the total savings in the upcoming budget would exceed new spending, she acknowledged that “finding savings is becoming increasingly difficult.”

“This budget will have a significant emphasis on addressing cost of living, especially combating inflation, and laying the groundwork for future growth,” stated the finance minister during an interview on ABC’s Insiders on Sunday.

“Inflation remains a key consideration in this budget, as it has been a primary focus for us.”

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“The investments we are making aim to alleviate inflationary pressures, while simultaneously, we must focus on strategic investments to foster economic growth,” Senator Gallagher added.

She also mentioned that there would be unavoidable expenses for programs reaching their conclusion, particularly in healthcare.

“There will be some reshuffling of existing expenditures, but the fiscal demands are real and growing,” she emphasized.

The government achieved a $22.1 billion surplus in 2022/23, marking the first surplus in 15 years, buoyed by robust commodity prices.

Treasurer Jim Chalmers has expressed his intention to secure a second surplus but has tempered expectations regarding its size.