Budget must restore the fiscal guardrails to take pressure off family budgets

Joint media release with
The Hon Angus Taylor MP
Shadow Treasurer

26 April 2023

Labor’s second Budget will be an opportunity to correct the mistakes of its first.

When Treasurer Jim Chalmers hands down his second Budget in May, he has the opportunity to take real action to help reduce inflation and the pressures on Australian families and businesses.

Shadow Treasurer Angus Taylor said Labor’s first Budget delivered what independent economists have described as “the weakest fiscal strategy in recent times.”

“In its first Budget, Labor increased spending by $115 billion, made the structural deficit worse, and abandoned all goals of balancing the Budget,” Mr Taylor said.

“This isn’t fiscal responsibility, it isn’t good budget management and Australian families are paying a high price for it. “Inflation comes from Canberra and Australians are looking for a government that will manage its Budget to take pressure off theirs.

“With independent economists predicting a commodities and income tax windfall of more than $90 billion, Labor must use this opportunity to pay down debt not spend more.

“This isn’t just about the bottom line. It is about making tough decisions on spending, and not raising taxes that will kill aspiration, hurt families and delay investment that provides jobs and helps small businesses to grow.

“If the government can’t deliver a strong surplus with the current strong commodity prices and the strong economy left to it by the Coalition, when will it ever deliver a surplus?”

Shadow Minister for Finance Jane Hume said this Budget must provide a plan to address the cost of living crisis and that it must be a plan with real fiscal restraint.

“Australian families are making tough decisions about their own budgets right now. Jim Chalmers and Anthony Albanese must show that they are prepared to do the same,” Senator Hume said.

“The government needs to manage its spending. Spending is easy and we have seen no fiscal discipline from Labor. But this Budget is a test for Anthony Albanese and Jim Chalmers to do the right thing for the economy, the right thing for families and the right thing for Australia.

“If Labor delivers another big spending Budget, it will be like having one foot on the accelerator while the Reserve Bank is putting its foot on the brake. The RBA has paused giving a chance for Labor to make the right call in this Budget. If they squib it, Australians will pay the price.”

This Budget must deliver:

1. Fiscal restraint to take pressure off families: the government should listen to the calls of the BCA, AiGroup, ACCI and market economists to restore the fiscal guardrails to instill budget discipline and return the Budget to balance.

2. Simpler and fairer taxes, not higher ones: higher taxes lead to higher prices. Increased taxes on business will only be passed on to consumers while destroying investment in the industries that are driving our economic recovery, employing Australians, and paying for our social safety net. Labor should commit to the stage 3 tax cuts in full and reverse its decisions to raise taxes on superannuation and franking credits.

3. Real action on productivity to make small businesses and families lives easier: Labor’s first Budget committed to big spending and big stick industrial legislation sold as productivity reform. Despite this, Deloitte Access Economics are forecasting GDP per capita to flatline, and independent analysis from the e61 institute has shown that Labor’s industrial relation reforms will stifle business growth and hurt competition. Labor must take real action on productivity to make Australians lives easier, not just spend more money and impose heavy-handed regulations.

4. Measured relief for small businesses and families that does not add to inflation: Australian families and small businesses are still waiting for the $275 in energy relief Labor promised before the election and the $1.5 billion promised at Christmas. Meanwhile, more than 10 million Australians will have $1,500 less in their pockets by tax time due to decisions taken by Labor.

5. No more broken promises: Labor has broken promises on taxing franking credits, on taxing super, on cheaper mortgages, on working with business, and on cheaper energy bills. Labor should abandon its policies that break these promises and take responsibility for the challenges facing Australians struggling to get ahead.

Budgets are statements of a government's priorities. Australians do not need more excuses and blame-shifting from the Labor Government on the cost of living. We need leadership and we're not seeing this from the Albanese Government.