The Australian federal budget improved considerably in May due to the extraordinarily high prices of the country’s commodities.
“Obviously, we want those numbers to come in strongly,” Treasurer Jim Chalmers told the ABC’s Insiders program.
“But what they don’t take into account is the volatility in our commodity prices. I think iron ore dropped 12 per cent last week, and that has implications for the budget.”
Speaking about the new figures, Shadow Treasurer Angus Taylor remarked that the robust budget performance was the result of the previous Coalition government’s solid economic management.
Nevertheless, the treasurer said the budget was suffering from a range of issues, including the interest rate payments on the government’s debts.
“As interest rates go higher and higher, the cost of servicing that debt goes up as well. So that’s another pressure on the budget,” Chalmers said.
Opposition Calls for Doubling Earning Threshold For Pensioners
In a related development, Opposition Leader Peter Dutton was pushing for a rise in the earnings threshold for Australian pensioners.
Current, pensioners are only allowed to earn around $300 a fortnight if they want to maintain their government allowance, and the Opposition has proposed to double this amount.
“This policy ensures that pensioners and veterans, who want to work, are not financially penalised. It puts more money into their pocket.
In response, Chalmers said the issue had been on the parliament’s table before the federal election took place as there was a need to increase the number of available workers in Australia.
“I’ve had good, productive conversations with National Seniors and others about whether or not we can do something here,” he said.
“Even an idea like this, which appears to be relatively modest, still comes with a relatively hefty price tag.”
Meanwhile, the treasurer is expected to provide a ministerial statement detailing economic updates, including government forecasts for inflation, when the parliament resumes in July.
“What that will show is that inflation will get worse before it gets better,” he said.
“That’s the expectation across the board now, and so that’s a difficult situation that we need to deal with before inflation hopefully moderates throughout the course of next year.”