10 November 2023

Albanese Government’s budget management helping fight inflation

The Albanese Government’s economic management has been strongly endorsed in a new independent assessment that says the budget is helping to fight inflation.

The Government’s fiscal strategy and decision to return the majority of revenue upgrades to the bottom line are reducing inflationary pressure in the economy, international ratings agency Fitch said overnight as it reaffirmed Australia’s AAA credit rating.

This is a powerful statement backing the Albanese Government’s responsible economic plan. It shows our budget strategy is right for the times and right for the challenges we confront, and is helping support Australians through these difficult economic times.

It comes a week after a similar endorsement from the International Monetary Fund, which backed the Government’s approach to addressing the inflation challenge.

“The Government has saved the bulk of the recent revenue windfalls, indicating a desire to maintain a fiscal stance supportive of reducing inflation and pursue prudent fiscal policies,” Fitch said in a statement.

Our responsible approach to managing the budget includes spending restraint and returning the majority of revenue upgrades to the bottom line.

We returned 87 per cent of revenue upgrades to the bottom line across two budgets, compared to the 40 per cent average of the previous government, and have recorded the first budget surplus in 15 years.

Across two budgets, we have found $40 billion in savings and spending reprioritisations, compared to zero savings in the last budget of our predecessors.

The Albanese Government’s combination of budget restraint, investments to lift the capacity of the economy, and targeted cost‑of‑living relief is all helping ease inflation in our economy.

The latest data from the Australian Bureau of Statistics shows that the Government’s cost‑of‑living policies reduced the Consumer Price Index around half a percentage point in the most recent quarter.

Australia is one of only nine countries to be rated AAA by all three major credit rating agencies and this was achieved for the first time under the last Labor Government.

The Albanese Government remains focused on dealing with the immediate cost‑of‑living challenges Australians are facing, while at the same time building a stronger, more productive, and more resilient budget and economy.