Anthony Albanese has swatted away suggestions his big-spending, “inflation fighting” budget is a pre-election sweetener, doubling down on his intention to finish a full term before Australians return to the polls.
A federal election is due by May next year, and with Treasury forecasting inflation will return to below three per cent by Christmas, the government is hoping interest rates might be slashed before the next election.
Opposition Leader Peter Dutton accused Labor of trying to “buy itself an interest rate reduction”, but pointed to economists’ warnings that the budget measures could do the opposite.
There are concerns the government’s $3.5bn power bill relief package, which would give 10 million households $300 off their bills over the next few years, could only add further pressure to inflation.
“This budget narrows the Reserve Bank’s already narrow path,” economist Chris Richardson warned.
Mr Dutton said Labor would have a lot to answer for if it had produced an “inflationary budget that will make it harder for interest rates to come back”.
“That will make it more difficult for families and small businesses for longer,” he said.
Labor have been accused of trying to buy an interest-rate cut ahead of the next election. Picture: NCA NewsWire / Martin Ollman
If the government can buck those expectations and put downward pressure on inflation as it claims it will be able to do, an early election wouldn’t be out of the question – but the Prime Minister wouldn’t weigh in on whether that was something he was considering.
“Look, we’re focused on the economy and getting the settings right, and we’ll leave the political obsession to our opponents,” Mr Albanese told ABC News.
The Coalition’s finance spokeswoman Jane Hume said the budget “certainly” had the “sugar hits” Australians could expect in the lead-up to an election.
Treasurer Jim Chalmers denied the assertion the cost-of-living package was about getting voters in a “good mood” before the next election.
“That’s not our motivation. Our motivation here is understanding that people are doing it tough, and that we need to provide substantial cost-of-living relief in a responsible way. That’s what the budget does,” he said.
Asked whether there would be another budget before the next election, Dr Chalmers said that “remains to be seen”.
Treasurer Jim Chalmers said he was prepared to deliver a fourth budget if required. Picture: NCA NewsWire / Martin Ollman
“I will certainly be ready to deliver another budget next year,” he said.
“Our intention, our inclination, is to go full term. But that decision is taken by the Prime Minister. If I need to do a fourth budget before we go to the people, I would be happy to do that, be ready to do that, but that is not a decision I take on my own.”
Mr Albanese meanwhile implied a March budget was likely, ahead of a May election.
“Well, you can’t do a Budget and an election in May. So by definition, you have to bring forward a Budget,” he said.
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