Treasurer Jim Chalmers insists the measures will add nothing to the country’s already high inflation.
Australia’s centre-left Labor government has pledged to allocate 14.6 billion Australian dollars ($9.88 billion) to the federal budget for cost-of-living relief for families and businesses, promising that this will not drive inflation fuel.
The plan announced Monday aims to directly ease price pressures and inflation, said the federal government, which retreated slightly in the first quarter but still sits near 30-year highs of 7 percent.
“The centerpiece of the budget … will be a cost-of-living relief that doesn’t add to inflation,” Treasurer Jim Chalmers said in a statement ahead of Tuesday’s federal budget.
“People are under the pump. We carefully calibrated and designed this budget so that it squeezes the cost of living rather than adding to it.”
The financial support will be spread over four years and will target more than 5 million low-income families, small businesses and retirees struggling with high energy bills.
Chalmers has repeatedly stated that his budget would be limited to spend so as not to increase inflationary pressures while providing some relief after the Reserve Bank of Australia (RBA) stunned markets with a rate hike last week, beating expectations of the traders for a longer pause were defied. .
The RBA warned on Friday that inflation risks were on the upside given low productivity growth, rising energy prices and an increase in rents.
The latest bailouts come after the government set aside $11.3 billion ($7.64 billion) for wage increases for aged care workers over four years, while imposing an additional 5 percent tobacco tax and $2.4 billion (Australia). $1.62 billion) in increased taxes on oil and gas producers.
Australia’s deficit is expected to shrink sharply, the budget is expected to show as the treasury bulges with fiscal windfalls from commodity exports, but the outlook will be bleak as fiscal challenges loom.