Jim Chalmers (you know the drill by now)

A university education is a life-changing opportunity.

But it should not leave Australians with a lifetime of debt.

This year, we will cut 20 per cent off all student loan debts, raise the minimum repayment threshold and reduce repayment rates.

Combined with our existing student debt relief, we will slash $19 billion in debt for more than three million Australians. [Not much help though for those at uni now or about to go – uni fees are still at the levels Scott Morrison thought were good]

Cheaper medicines [speak louder, for the pensioners, Jim!]

Speaker, In every Budget including this one, we’ve made medicines cheaper.

Tonight, we reduce the maximum price for a PBS script from $31.60 to $25.

Pensioners and concession cardholders will still pay $7.70 a script because we froze their costs as well.

We’re also investing $1.8 billion to list more life-changing and life-saving medicines on the PBS.

For example, cutting the cost of a lymphoma treatment will save some Australians more than $600,000.

[The government absolutely loved the recent kerfuffle from the US Big Pharma companies. Protecting the PBS is the easiest of easy goals. It’s 10m out straight in front. And the govt had been looking for some safe ground to get hariy-chested towards Trump. And that gave it to them]

Jim Chalmers (and Grogs) continue:

Tonight, we are providing an additional $2.6 billion to fund pay rises for aged care nurses from March this year – So the workers we trust to care for our parents and grandparents get paid properly for the work they do. [This is money that has already been spent. It was a very worthy policy, but it was done in the 2023 -24 budget and the 2024-25 MYEFO. This year there is just an additional $82m over the next 4 years – nice but there’s a reason Chalmers is saying $2.6bn and not $82m]

We’re reforming non-compete clauses, to lift wages by up to $2,500 for workers covered by them.

We’ve supported a historic wage increase for the early childhood education and care workforce.

And we’ve backed pay rises which ensure the National Minimum Wage has risen by almost $7,500 a year.

A fair go for families and farmers

Speaker, We know that Australians are still under pressure, and a lot of that pressure is felt at the checkout.

That’s why we’re cracking down on the supermarkets.

By empowering the competition watchdog, making the Food and Grocery Code mandatory, increasing penalties and boosting competition. [A reminder when the ACCC released its report damning the high profits of Coles and Woolworths – higher than other supermarkets overseas, investors were so worried about what might happen that they bought Coles and Woolies shares and their share price went up around 5% each that day. So yeah, no one thinks this will do anything]

At the same time, we’re targeting excessive surcharging, scams and unfair trading practices that harm consumers

Still on the speech:

Chalmers: (and Grogs)

Electricity prices went down 25 per cent here last year but they’re still putting pressure on households around the world. [This was an excellent example of how government CAN bring down inflation. But because they were due to run out, the government not surprisingly kept them going, because they were an obvious thing to do, and the Liberal Party probably would have done it if the government hadn’t. As it is Dutton described them as a Ponzi scheme, and then said he’d still support them. Don’t you love politics?]

Chalmers:

Two rounds of energy rebates have helped take some of the sting out of energy costs.

Tonight, we’re providing $1.8 billion more energy bill relief.

Every household and around one million small businesses will receive energy rebates until the end of 2025.

This means cutting another $150 off bills this year.

The Government will also be using the powers and penalties of the energy regulators and the ACCC to help ensure:

• Energy companies offer customers cheaper deals;

• Pensioners receive the discounts they are entitled to; and

• Australians get the value they deserve.

[lol – the ACCC. The energy companies will be shaking!]

Chalmers:

Earning more and keeping more

Speaker, At the core of our economic plan – and the very heart of our Labor Government – is a simple objective:

To ensure more Australians earn more and keep more of what they earn.

In the five quarters before our first Budget, real wages fell in annual terms.

They have now grown for the last five.

Real incomes per capita are growing now too. [this is the big measure of “are you better off now that 3 years ago

Jim Chalmers (and Grogs) continue:

Tonight, the Government is proud to be delivering more tax relief.

Every Australian taxpayer will get a tax cut next year and the year after, to top up the tax cuts which began last July.

This will take the first tax rate down to its lowest level in more than half a century. [the bottom tax rate – for earnings between $18,2000 to $45,000 will go from 16% to 15% in 2026-27 then 14% in 2027-28. Before the Stage 3 tax cuts, it was 19%. So that is a fair cut for those on low incomes. It means everyone over $45,000 will get a $268 cut in both of those two years, but it also means the biggest “percent” cut will be for those on $45,000. And that to be honest is how it should be – especially given the Stage 3 tax cuts delivered the biggest cut for those on $135,000].

These additional tax cuts are modest but will make a difference.

The average earner will have an extra $536 in their pocket each year when they’re fully implemented.

Combined with our first round of tax cuts, this rises to $2,190. And the average total tax cut will be $2,548, or about $50 a week.

We will also increase the Medicare levy low-income thresholds, which is extra tax relief for more than a million Australians. [worth $122 for someone earning between $28,000 and $32,000]

Our $17 billion in tax cuts are the biggest part of the responsible cost-of-living package in this Budget.

But they’re not the only part.

Jim Chalmers (and Grogs)

But there’s more work to do because people are still under pressure.

The cost-of-living is front of mind for most Australians and it’s front and centre in this Budget. [and the election campaign]

We know the welcome improvements in the aggregate numbers don’t always immediately translate to how people are feeling and faring.

We’ve made a lot of progress together but we know many people are still doing it tough.

Our plan to rebuild living standards starts with cost-of-living help and wages growth.

It includes more hip pocket help for households:

• Two new tax cuts for every taxpayer;

• More energy bill relief;

• Increasing wages and reforming non-compete clauses;

• More bulk billing and cheaper medicines;

• Student debt relief; and

• A fair go for families at the checkout and farmers at the farm gate.

Jim Chalmers (and Grogs):

Unemployment is now projected to peak lower, at 4¼ per cent. [This is big item in the budget papers for economic nerds – the Treasury is telling the RBA it is wrong – we can have unemployment at 4.25% without any pressure on inflation. The RBA still thinks it is 4.5%. Of course the whole “NAIRU” is a bit of mythical thing, but at least here the Government is saying 4.25% is the aim, not 4.5%]

Employment and real wage growth this year will be stronger, and participation will stay near its record high for longer. [The government is arguing the removing non-compete clauses for workers will raise wage growth. It’s a good move. One that Joseph Stiglitz talked a lot about last year when he was out here as a guest for our 10 year anniversary. Non-compete clauses mean for example someone can’t go from working in Big W to K Mart. They make sense for executives stopping them going from say Westpac to ANZ, but not for bank tellers or people working in a store – if you can’t compete, then companies don’t need to compete for workers by offering higher wages]

Inflation is coming down faster as well.

Treasury now expects inflation to be sustainably back in the band six months earlier than anticipated.

All of this means the soft landing we have been planning and preparing for is looking more and more likely.

Because of our collective efforts, the worst is behind us and the economy is now heading in the right direction.

Jim Chalmers continues – Greg Jericho has helpfully annotated the speech ahead of time:

The global economy is volatile and unpredictable. [but our economic forecasts will assume all is pretty smooth!]

The 2020s have already seen a global pandemic, global inflation and the threat of a global trade war.

The whole world has changed as a consequence.

Tariffs and tensions abroad have been accompanied by storms at home.

Ex-Tropical Cyclone Alfred could wipe ¼ of a percentage point off quarterly growth.

North and Far North Queensland have flooded.

Storm clouds are gathering in the global economy too.

Trade disruptions are rising, China’s growth is slowing, war is still raging in Europe, and a ceasefire in the Middle East is breaking down.

Treasury expects the global economy to grow 3¼ per cent for the next three years – its slowest since the 1990s. [This is a major point against those saying we should have a surplus – surpluses SLOW the economy. Does anyone think we need a slower growing economy right now?]

It’s already forecasting the two biggest economies in the world will slow next year – with risks weighing more heavily on both.

Australia is neither uniquely impacted nor immune from these pressures, but we are among the best placed to navigate them.

We’re emerging from this spike in global inflation in better shape than almost any other advanced economy.

Growth is forecast to pick up from 1½ per cent this year to 2½ per cent in 2026–27.

The private sector is resuming its rightful place as the main driver of this growth – With Treasury upgrading forecasts for growth in private demand to more than double next year, compared to this one. [sound great, but given private demand growth this year is just 1%, doubling is not hard]

And turns out there was a surprise or two in this budget – when Sabra Lane asked Jim Chalmers this this morning, he laughed. Now we know why:

Chalmers:

This Budget builds on the progress we’ve made, together.

It’s a plan to help with the cost of living – With two new tax cuts, and higher wages – More bulk billing, and more help with electricity bills – Cheaper medicines, and less student debt. [Surprise! One of the best kept secrets in many years of budgets – tax cuts]

And it’s a plan to build Australia’s future – With more homes – New investments in skills and education – Competition reforms and a Future Made in Australia.

Speaker – Our economy is turning the corner.

Inflation is down, incomes are rising, unemployment is low, interest rates are coming down, debt is down, and growth is picking up momentum.

On all these fronts, our economy and our Budget are in better shape than they were three years ago. [Interesting how both the Government and the opposition like to compare things now to three years ago – not just because that was when the government changed, but it was before the full impact of inflation – a good comparison for the LNP – and was also a time when everything was still recovering from the pandemic – so good for the ALP]

This progress has been exceptional, but not accidental.

The credit belongs to Australians in every corner of our country. [take a bow, everyone]

We’ve come a long way, but there’s more work to do.

This Budget is our plan for a new generation of prosperity in a new world of uncertainty.

It’s a plan to help finish the fight against inflation –

Rebuild living standards – [living standards have been a big thing – expect to hear the LNP repeat “are you better off than you were 3 years ago. You probably are not – due to prices going up more than wages but at least real wages are going up again – indeed over the next 4 years the budget forecast real wages will rise by 3.8% – the best 4 years rise since 2015, and a hell of a lot better than the 4.7% fall in the 4 years to June 2022]

And maximise our national advantages into the future.

This is a responsible Budget with five main priorities:

• Helping with the cost-of-living;

• Strengthening Medicare;

• Building more homes;

• Investing in every stage of education; and

• Making our economy stronger, more productive and more resilient.

And the budget is LIVE.

The take away from the numbers:

This Budget improves the bottom line by $1.6 billion over the forward estimates compared to MYEFO, and the deficit in 2025-26 is forecast to be $42.1 billion – lower than MYEFO and lower than what we inherited.

And the bits the government wants to highlight:

• The Budget position has improved by $207 billion over the seven years to 2028-29 and is better in every year over the forward estimates.
• Debt is $177 billion lower this year, which will help us avoid around $60 billion in interest repayments over the decade.
• Real payments growth is estimated to average 1.7 per cent per year over the seven years to 2028-29, which is around half the average under our predecessors.
• We have identified $94.1 billion in savings and reprioritisations.
• We have returned 69 per cent of upwards revisions to tax receipts compared to our predecessors who averaged around 40 per cent.

OK, we are getting to the pointy end.

The media can’t hit go on their pieces until Jim Chalmers gets to his feet, so there are some very nervous editors with their fingers hovering over the publish button right now.