Jim Chalmers:
On Wednesday, Katy Gallagher and I will be handing down the seventh budget update of the Albanese Labor government. This budget update is all about delivery, responsibility and restraint. It won’t be a mini budget. There’s not a lot of new stuff in there, but there is a lot of hard yards to make room for our priorities, to deliver on our commitments and also to make sure that we can accommodate some of these big upward pressures on the budget.
There’s about $35 billion worth of pressures from estimates variations. If you take the GST out of that, still leaves about $25 billion worth of pressures in areas like natural disasters, the age pension, veterans, defence super and the like. So the big task for Katy Gallagher and I and the Expenditure Review Committee has been to make room for these pressures on the budget in a way that ensures that the budget doesn’t go substantially backwards.
The key thing to remember about this government and about this mid‑year budget update, this Albanese Labor government is defined by responsible economic management, and the mid‑year budget update will be defined by responsible economic management as well. This is all about ensuring that we deliver on the commitments we took to the Australian people in May. It’s all about making room for those pressures and it’s also an opportunity for us to update our forecasts.
There will be $20 billion of savings in the mid‑year budget update on Wednesday. To give you a sense of the magnitude of that, it took our predecessors 7 budget updates to find $20 billion in savings. We have $20 billion in this one budget update which we will release between now and Wednesday. What that shows is we’ve now found $114 billion in savings and reprioritisations to make sure that we are funding the things that our community desperately needs – strengthening Medicare, 3 rounds of tax cuts, building urgent care clinics, investing in mental health and building more homes.
What you’ll see in the mid‑year budget update is us delivering on our commitments in those important areas, making sure we’re funding our commitments to 100,000 new homes for first home buyers, making sure we’re meeting our commitments to mental health and also to fast track tradies and to build infrastructure in local communities.
2025 has been a year of delivery and the mid‑year budget update will be all about delivery as well. Now those $114 billion in savings combined with spending restraint is the sort of responsible economic management which would be unrecognisable to our predecessors. As I said, it took them 7 updates to find $20 billion. Our $114 billion in 7 updates is 5 times what they found in their final 7 updates. And so Katy Gallagher and I will detail those savings during the course of the week.
The mid‑year budget update has got a number of difficult decisions in there. A difficult decision not to extend a fourth round of electricity bill rebates. That wasn’t an easy decision, but it was the right decision. We’ve said for some time that those electricity bill rebates are an important part of the budget, but not a permanent part of the budget. They are one way that we’re helping Australians with the cost of living, but not the only way. And by not extending those electricity bill rebates, that signifies a shift from temporary help with the cost of living to permanent and ongoing help with the cost of living delivered via the tax system.
So our commitment to helping with the cost of living has not changed even as the nature of that cost‑of‑living help has evolved over time. A big shift from temporary help to permanent help delivered via the tax system, via bulk billing, cheaper medicines, cuts to student debt and all of the different ways that we are helping with the cost of living.
Now the mid‑year budget update, as I said, will deliver our commitments on housing and mental health and infrastructure and skills. We’ve also made very substantial progress in the last couple of days when it comes to 2 other important commitments.
We are cracking down on price gouging by the big supermarkets. This is a commitment we took to the election. It is now law, and it will come into being next year. This is all about making sure that families and pensioners get a fairer go at the checkout. We know that people are under pressure. We want to make sure, and we will make sure that the supermarkets are not price gouging their customers and that’s what this important change is all about.
We’re also bringing in our cash mandate. Our cash mandate means that there is an obligation on supermarkets and fuel retailers to accept cash. This is all about ensuring that when Australians want to or need to use cash at the supermarket or the servo that they can use cash. Because even as fewer and fewer people are using cash in our economy and in our communities, we know that there are a number of people who still like to use cash. This is about making it easier for people to use cash to buy essentials at the supermarket and the servo. We’ve done a lot of consultation, we’ve done a lot of work on this, and we believe that we’ve struck the right balance when it comes to this cash mandate.
So a lot of activity, a lot of action in this portfolio when it comes to supermarkets, when it comes to cash, and obviously when it comes to the mid‑year budget update. We know that even after Wednesday there will be a lot more work to do to make our economy stronger, to lift living standards and boost wages and make our budget more sustainable. But we’ve done a lot of work in this mid‑year budget update to make room for our priorities and pressures. You’ll see that on Wednesday. It won’t be a mini budget. The main game will be in May with the 2026 Budget but we will make substantial progress when it comes to the numbers that we release on Wednesday. Happy to take a couple of questions.
Journalist:
Are MPs’ travel entitlements too generous or do you agree with the charges that your colleagues have racked up?
Chalmers:
Look, I understand that there is very substantial community concern about these arrangements. I think it’s appropriate that the colleagues have sought assurances from the independent body that these claims are within the rules. I’m confident that they are, but it’s appropriate that they’ve asked to put that beyond doubt. It’s also appropriate that the Prime Minister has asked the organisation at arm’s length from the government for advice on any changes which may be necessary. So, we will await that advice. We’ll get it in due course. In the interim, of course, as Treasurer, my focus is on delivering with Katy Gallagher the mid‑year budget update on Wednesday.
Journalist:
But haven’t your own colleagues cruelled your credibility to ask Australians to bear spending cuts by spending big on their travel allowances?
Chalmers:
Well, it’s always important that colleagues from all sides of the parliament act within the rules. I’m confident that’s what’s happened here. But there are good reasons why colleagues from time to time will ask for that to be put beyond doubt by the independent authority. There are good reasons why this regime is maintained at arm’s length from politicians and good reasons why the PM has asked for advice on any changes which may be necessary.
Thanks very much.