In a rapidly changing economic environment, Treasurer Jim Chalmers must use the budget he hands down tomorrow to deliver a coherent plan to deal with the current cost of living crisis which is very real and painful for so many Australian families.
Shadow Treasurer Angus Taylor said Labor’s first budget must make hardworking businesses and households a priority.
“Prices on just about everything are going through the roof. Australians are feeling it at the grocery checkout, in their power bills, at the fuel bowser, when they go out for a meal and when they’re buying furniture,” he said.
In a climate of rising interest rates, soaring inflation, low real wages and shrinking wallets, Mr Taylor believes that in the short term the government must:
- Put downward pressure on inflation and interest rates without increasing taxes. The government should heed the calls of stakeholders and the community to commit to the Coalition’s tax to GDP cap of 23.9 per cent to put a speed limit on spending and include a plan to return inflation to within the Reserve Bank’s target of two-three per cent. The government’s budget cannot respond to growing cost of living pressures with increased taxes.
- Build upon the strong position the government has inherited from the Coalition and not deteriorate the bottom line. Labor has inherited the lowest unemployment rate in decades, economic growth over three per cent, and an improving budget bottom line. A high-taxing, high-spending traditional Labor budget will only make the Reserve Bank’s job harder next Tuesday.
- Deliver relief to supply side pressures in the economy by increasing productivity and participation. The government must reject changes to industrial relations that will start a wage-price spiral and damage the productivity of our struggling small and family businesses.
- Avoid breaking promises made to the Australian people at the election to bring down power bills by $275, to implement the stage three tax cuts in full, to bring down the cost of living and to increase real wages.
In the medium term, Mr Taylor points out that the government must:
- grow the economy and contain spendingto reduce pressure on the Budget, and
- adopt pro-growth policies that support innovation, enterprise, and reduce red tape.
“Prices on just about everything are going through the roof. Australians are feeling it at the grocery checkout, in their power bills, at the fuel bowser, when they go out for a meal and when they’re buying furniture,” Mr Taylor said.
“The Treasurer must avoid the temptation of handing down a traditional big spending, big taxing budget that puts Labor’s big government agenda front and centre. A budget like this will only make the current cost of living crisis worse.
“If the Treasurer can deliver on these priorities we will back him in. If not, we will hold him to account.”