The federal government is considering a one-off payment for low- to middle-income earners, to ease Australia’s escalating cost-of-living expenses including housing, petrol and groceries.
Treasurer Josh Frydenberg flagged the payment in an interview with ABC Radio this week, saying families would be prime targets for financial relief.
“We fully understand that the number one topic around the kitchen tables of Australia is cost of living, and there will be some relief in this Budget,” he said.
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Mr Frydenberg would not confirm the amount until the Budget on 29 March but there is speculation it would likely between $200 and $400. The low- to middle-income tax offset of between $255 and $1080 has not been secured past the current financial year.
In the ABC interview, Mr Frydenberg said the government didn’t want to “overheat the economy”, a claim he backed up in an address to the Australian Chamber of Commerce and Industry (ACCI) in Canberra last week where he said there would be no sudden moves in the Budget.
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Mr Frydenberg said financial support for COVID-affected businesses or individuals was no longer in the mix and instead the Budget would include measures to support families to meet cost-of-living pressures.
“The time for large-scale, economy-wide support is over,” he said.
“With our tight labour market and our strong economic recovery, continued support at that level would do more harm than good. It would risk putting further pressure on inflation, interest rates and cost of living.
“It is important to move to the next phase of fiscal strategy, which will stabilise and reduce debt as a share of the economy.”
However, the opposition has described the Budget as nothing more than a vessel to return the government to power.
In a press release, Labor treasury spokesperson Jim Chalmers said working families are going backwards.
“The Budget might be recovering because of commodity prices but Australians facing skyrocketing costs of living and failing real wages are still being left behind,” Mr Chalmers said.
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He said a Deloitte Access Economics Budget Monitor report claimed that improvements in the Budget were despite the federal government, not because of the federal government.
“Deloitte has spelled out in detail how these improvements are largely a result of the commodity prices boom, rather than good economic management,” Mr Chalmers said.
“The Coalition is showing all the signs of yet another Budget full of secret slush funds before the election and secret cuts after it.
“Next week’s Budget won’t be about getting Australians through tough times or setting up our country for a better future, it’ll be about getting the Liberals and Nationals through an election.”
The federal deficit is forecast to be $106.6 billion for the 2021–22 financial year.
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