Australian PM Rejects Inflation Concerns as New Budget Announced

Australian Prime Minister Anthony Albanese speaks at Parliament House in Canberra, Australia, on March 30, 2023. Martin Ollman/Getty Images

Australian Prime Minister Anthony Albanese has assured the public that the latest round of government relief for low-income Australians would not fuel inflation amid warnings from the opposition.

In an interview with ABC Radio on May 10, the prime minister reiterated the government’s views that the $14.6 billion living cost package outlined in the 2023-2024 federal budget had no impact on the country’s inflationary situation.

“We are dealing with a global economic challenge of inflation. So what we did was to provide support to take pressure off people,” he said.

“This is a responsible budget which at the same time looks after people.”

Among the cost of living measures introduced in the budget was an increase to the base rate for JobSeeker, Austudy and Youth Allowance support payments by $40 (US$27) a fortnight, which would benefit around 1.1 million people.

The Labor government also expanded access to single-parent payments by raising the age threshold of the children from eight to 14, allowing eligible parents to continue to receive support for another six years.

Other measures included a 15 percent lift to the maximum rates of Commonwealth Rent Assistance, a $500 electricity bill relief for eligible households and businesses, as well as cheaper childcare and healthcare costs.

Albanese said the government balanced the needs of the economy and the needs of the people in devising the measures.

“You don’t make decisions based upon one thing. You'd look at the overall budget,” he said.

“What this government needed was a responsible budget that made savings that delivered a stronger economy that laid those foundations for people, whilst at the same time providing support for those most in need to take pressure off them.

The prime minister also noted that the government could not provide everything that was called for in every budget and was focusing on what it could do for people in a practical way.

In addition, Albanese said the government did not plan to make changes to the stage three tax cuts expected to come into effect in July 2024.

“We haven’t changed our position,” he said. “It’s something that was legislated some time ago. It wasn’t a part of our consideration in this budget.”

Opposition’s Inflation Warnings

Despite the prime minister’s confidence, Opposition Leader Peter Dutton said the budget would likely prompt the Reserve Bank to raise interest rates.

“Under this budget, at the very least, we know that interest rates will be higher and for longer, which is going to be a double whammy for Australian families,” he told Sky News.

“For families, they are struggling at the moment, big time, and there’s nothing at all for them in this budget.”

The opposition leader also blamed the government for the energy crisis, saying it was the making of Labor’s policies.

Leader of the Opposition Peter Dutton at a press conference at Parliament House in Canberra, Australia, on March 14, 2023. AAP Image/Mick Tsikas

“When the prime minister promised that power bills will be reduced by $275, we find out in this budget that over the next 12 months, electricity bills likely go up almost by $500,” he said.

At the same time, Dutton pointed to the impacts of the 1.5 million immigrants coming to Australia over five years in the budget.

“You don’t have any planning for this. Three hundred thousand people a year on average will contribute to the housing crisis and the rental crisis,” he said.

“At a time when we don’t need an inflationary impact, that is going to be a very significant one.”

Dutton’s warnings come as the budget projected a $4.2 billion surplus for the current financial year after the government banked more than 80 percent of revenue gains from high commodities prices and a strong labour market.

However, the government expected to see deficits of $13.9 billion in 2023-24, $35.1 billion in 2024-25, $36.6 billion in 2025-26 and $28.5 billion in 2026-27.