The federal government's mid-year budget update shows a slightly smaller deficit in the 2024-25 financial year than what was presented in May, but larger deficits over the next three years. The mid-year update includes new spending on childcare, healthcare and infrastructure, and a large saving in aged care.
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TVTranscript
00:00This financial year, there will be a deficit of $27 billion.
00:06Now it is a little bit smaller than forecast in the budget, around $1.4 billion smaller,
00:13and that's thanks to higher tax receipts from a stronger job market.
00:17But from there and the years going forward, the deficits will get deeper.
00:21In total, cumulative deficits will get deeper to $143.9 billion over the next four years.
00:29There are a number of factors that the Treasurer is attributing to this growth in the deficits,
00:36namely what he is calling unavoidable spending on services like Medicare and welfare payments,
00:42but also a downgrade in mining exports, and as a result, a downgrade in some of the revenue
00:49that the government collects from that.
00:50Now Jim Chalmers says that despite this, this is a responsible set of books and that he
00:55has struck the right balance with what he is calling that unavoidable spending.
00:59Here he is earlier today.
01:02A lot of this spending which is in the budget is pressure that no responsible government could deny.
01:11You know, we're talking here about extra kids enrolled in early childhood education.
01:16We're talking here about indexation of the age pension.
01:19We're talking about strengthening Medicare.
01:22And so when our opponents say that there is too much spending here, that they should nominate
01:27which of this spending on Medicare or medicines or pensions do they think is inappropriate
01:32because that is the main driver of this spending that we're seeing in the budget, and it would
01:37be madness, not just in fairness terms, but it would be madness in economic terms, given
01:42how little growth there is in the economy right now, to slash and burn in the budget.
01:47What's been the response from the opposition, Pablo?
01:50Ros, well, the government has certainly celebrated those last two years of consecutive surpluses.
01:57So this deficit really does set the political scene heading into the next election.
02:02Now, from the outset, the opposition has said that these MyEFO figures will be a test for
02:08Labor, for the government on how it is going to improve the budgets of households.
02:13And we heard from the shadow treasurer, Angus Taylor, a little bit earlier.
02:19Australians have to foot that bill.
02:21This is not free money.
02:23It doesn't come from the sky.
02:25Australians have to pay that bill.
02:26And they pay it either through higher inflation, higher taxes and or higher interest rates.
02:34And right now, in recent times, we've seen around the world that kind of spending most
02:38of all translates into higher inflation.
02:42Every Australian has to pay that price.
02:44This is not free money.
02:47So the shadow treasurer there, Ros, interestingly, the treasurer has remained tight-lipped on
02:52whether there will be further spending or further support for cost of living relief
02:57for Australians.
02:58There is a figure in these MyEFO figures known as decisions taken, decisions taken but not
03:04yet announced.
03:05And there is $5.5 billion of that set aside and the treasurer remaining tight-lipped on
03:10whether there could be more cost of living relief as we head into an election year.