Federal budget: Power bill relief promised by Treasurer Jim Chalmers

The Albanian government promises to help more than five and a half million households pay their sky-high energy bills.

Treasurer Jim Chalmers told the ABC on Sunday morning that the measure in next week’s federal budget, which is expected to allocate $500 to each household to help with bills, will also be available to more than a million small businesses.

“They’re all eligible for hundreds of dollars to help with their electric bills to take some of the lead on what are the main drivers of these cost-of-living pressures,” he said.

The amount made available depends on the cost of electricity for the area.

Dr. Chalmers said it would also depend “on how much the states and territories are willing to step in because this is a co-investment with them” how generous the aid will be in different parts of Australia.

The measure will also aim to help the ‘most vulnerable’, but will not be limited to pensioners only. Dr. Chalmers promises the budget will help soften the edginess of inflation.

“What we’ve tried to do with the budget in general, especially the cost of living, is try to reduce inflation a little bit, rather than add to it,” he said.

Dr. Chalmers expressed optimism that inflation could be brought under control sooner than previously forecast.

However, he did not expect average wage growth to catch up with inflation until early next year, thereby increasing real purchasing power.

Dr. Chalmers warned that the budget would portend a slowing economy and that would be felt even more per capita as high migrant inflows overshadow economic growth, potentially leading to a “per capita recession.”

The treasurer stressed that the high influx of 300,000 migrants this year and the expected 400,000 next year was not a result of government targets, but of a rapid return of foreign students and long-term tourists following the border closures of the Covid pandemic.

While the budget is widely expected to return to a surprising surplus, Dr Chalmers warned that this could only be temporary.

“Budget pressures after that (next year) will increase rather than decrease,” he said after being asked about the new heavy defense spending and the rising cost of national disability insurance.

Dr. Chalmers said it was a misconception that the improved state of the budget was solely due to the tax reaped from the skyrocketing price of raw materials such as iron ore.

“Resources are an important part of the story, but not the main part of the story,” he claimed.

“Only about a fifth (of the improvement) comes from higher commodity prices, the biggest improvement, 40 percent of which comes from the labor market, lower unemployment and higher wage growth.”

Another measure that will also benefit the budget is a $2.4 billion increase in the Petroleum Resource Rent Tax, which oil and gas companies must pay for their offshore liquefied natural gas projects over the next four years.

The amount of government support that households and small businesses receive depends on their location

Dr. Chalmers said there has been “wide consultation” with the industry about the changes, which will limit the amount companies can deduct project costs from revenue from July 1.

The treasurer said these measures “would rather put more strain on these projects and it means it can help fund our cost of living package and other budget priorities.”

On the controversial state three tax cuts inherited from the Morrison Coalition government, the treasurer again hit back suggestions that they be abolished.

“Our position hasn’t changed,” Dr. Chalmers said.

He said the tax cuts were a way to reinstate the tax cut, where high wages lead people to pay proportionately more taxes, and that the cuts would start at the relatively modest $45,000 a year.

“We have always supported tax relief for low and middle income earners,” he said.

Dr. Chalmers announced that the budget will also increase indexation to provide $4 billion more for community services.

Providers that will benefit include mental health, disability, domestic violence and homelessness services, the Medicare Benefits Schedule, and community nursing services.

Shadow treasurer Angus Taylor said the acid test for the budget would be whether it puts downward pressure on inflation, which currently runs at seven percent a year.

“If you want to help all Australians, all vulnerable Australians, not just those you can identify and those you pick, if you want to help all vulnerable Australians, you have to get inflation under control,” Taylor said. said.