The worker has inherited a “disastrous” budget situation with a deficit that could explode further due to rising inflation, warned Treasurer Jim Chalmers.
Chalmers accused the Coalition of not revealing pressure on the budget, revealed at Treasury meetings since the Labor election victory on Saturday.
Prior to its defeat, the Coalition projected that budget deficits would amount to $ 223 billion over the next four years, which Labor said would increase by $ 7.4 billion to implement its policies, including more generous subsidies for child care.
Labor has said it will partially offset its promises by cutting $ 3 billion in public service spending on contractors and labor, and $ 2 billion from a crackdown on multinational tax evasion. .
On Wednesday, Chalmers said the work was “inheriting a very serious set of economic and budgetary challenges.”
“The challenges that define our economy are soaring inflation, rising interest rates, falling real wages and not being close enough to show a budget that is absolutely loaded with a trillion dollars in party debt. liberal, “he told reporters in Canberra. .
“We need to make sure that we are facing the people of Australia with the seriousness and the nature and the magnitude of the challenges that our new government is inheriting from our predecessors.
“No new government can turn a switch and wipe out $ 1 million in debt, turn on a switch and completely solve the substantial problems we have with rising inflation and falling real wages overnight. “.
Chalmers said Labor had already identified “$ 11 billion in budget improvements, which is a good start,” but would continue to look for savings in all budgets.
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Asked about the possibility of a better budget result due to rising commodity prices, Chalmers warned against “assumptions about budget improvements.”
“Commodity prices have been stronger than expected for some time, but there is no guarantee of this budget increase and there are other factors working against us, including some pressure on the budget that was not disclosed or reserved by the previous government. “
Chalmers said “inflation is worse than the Treasury thought not long ago,” suggesting the budget could reveal a surge in the cost of infrastructure and other projects, but declined to give details on which landmines he had discovered in his briefings.
Chalmers confirmed that Labor would push for changes in international tax rules to create a universal minimum corporate tax rate, as well as its own plans to increase the taxation of multinational companies.
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Chalmers said he had discussed a monetary policy review with Reserve Bank of Australia Governor Phil Lowe, but that all existing agreements would continue until completed.
“This is a really important opportunity to examine the framework, the operations, of the Reserve Bank to make sure that we are doing monetary policy in this country in the best possible way and taking into account the interaction with fiscal policy as well.” he said.
Earlier on Wednesday, Chalmers hinted that Labor would continue to look for measures to alleviate the cost of living in its October budget, but it was unlikely that the six-month extension of the excise tax would be extended. .
“This comes out in September in legislation that was passed before the election,” he told 2GB Radio.
“Obviously, when the time comes … if there are things we can do to make things easier for people, we’ll do it. But we have to think about being responsible with the budget. That’s why it will be difficult to prolong the gasoline beyond September “.
Chalmers and Finance Minister Katy Gallagher also confirmed that Labor will present a presentation to the Fair Labor Commission review on the minimum wage.
Gallagher told ABC TV it was “quite late in the process”, but that Labor would add a presentation after ministers were sworn in next week.
Gallagher said the work would argue that “low-income workers [wages should] keeping up with the cost of living, ”but a final decision on whether to propose a 5.1% salary increase supported by Anthony Albanese in the campaign would be taken later.