Federal Budget 2024: Massive deficits ahead after Anthony Albanese’s cash splash as Treasury predicts a staggering $122billion dive into the red over the next four years

The Albanian government has announced a $9.3 billion surplus in the federal budget, but structural deficits will see this figure fall by $122 billion over the next four years.

Jim Chalmers unveiled his third budget on Tuesday evening, the second consecutive labor surplus in almost two decades.

However, due to the inevitable pressure on expenditure from the National Disability Insurance Scheme, the elderly care sector and cost of living relief measures, the balance will fall sharply to a deficit until 2028.

The surplus will shift in the 2024-25 budget, with finances in the red by $28.3 billion, rising to $42.8 billion in 2025-26.

Shortages will coincide with a decline in iron ore production prices fell to just $60 per tonne – down from levels above $100 – while thermal coal prices plummeted to $70 per tonne.

A fall in key commodity prices means the government will have less revenue from business taxes, with every $10 per tonne fall in iron ore prices set to reduce gross domestic product by $5.3 billion in 2024-25.

That figure will rise to around $11 billion by 2027-2028.

The NDIS is the government’s third largest expenditure, budget documents show, and is estimated to cost $48 billion next financial year and $60 billion in 2027-28.

Over the four years of preliminary estimates, this will cost $218 billion, with an average annual increase of 9.2 percent.

According to 2024-25 federal budget documents, payments to the program – which supports 600,000 people – will increase by $15.9 billion between 2023-24 and 2027-28.

If a revision of the plan is approved by Parliament, this amount will be reduced by $14.4 billion over the next four years, bringing the amount to $1.5 billion.

A major expense for the government is the National Disability Insurance Scheme (stock image of nurses in Sydney)

NDIS Minister Bill Shorten said that some new measures funded from the budget, including support for the crackdown on fraud, would “ensure that every dollar of funding goes to those who need it most.”

Cost-of-living relief measures include a $300 utility bill credit for each household, increased rental assistance and the cancellation of $3 billion in student debt indexation.

The new relief is in addition to the phase three tax cuts announced in January. The average household will receive an annual tax cut of $1,888, or $36 per week.

On Tuesday evening, Dr Chalmers introduced his third consecutive budget as a ‘budget for the here and now, and a budget for the decades to come’.

“It is a responsible budget that helps people under pressure today and invests in the promise and potential of a more prosperous future that we can realize together,” he told Parliament.

“The comprehensive cost of living plan in this budget delivers a tax cut for every taxpayer and provides new energy bill relief for people and small businesses.”

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