Australian Treasurer Says $14.6 Billion Living Cost Relief Won’t Add to Inflation

Australian Treasurer Jim Chalmers Delivers his Budget Address at Parliament House in Canberra, Australia, on Oct. 25, 2022. Martin Ollman/Getty Images

Australian Treasurers Jim Chalmers has refuted the idea that the newly announced $14.6 billion (US$9.88 billion) living cost relief will worsen inflation.

In an interview with ABC Radio, the treasurer said the relief package included “responsible spending” and would not add pressure to inflation.

Among the cost of living supports to be featured in the May 9 budget is an energy price relief of up to $500 for Australians on pensions and other types of welfare payments and small businesses.

Around 5.5 million households and one million businesses will benefit from this $1.5 billion spending.

The cost-of-living package will also include investments in cheaper medicines and tax incentives for electrification and energy efficiency upgrades.

“And the centrepiece of the budget tomorrow night will be this cost of living relief. That doesn’t add to inflation,” Chalmers said.

“And so what we’ve done is we’ve carefully calibrated and designed this budget so that it takes the pressure off the cost of living rather than add to it, and people will see how we’ve gone about that tomorrow.

“We’re conscious as we work through the various options of which ones do and don’t add to the inflation forecasts in the budget.”

Pointing to the energy price relief, the treasurer said it was the best example of responsible spending as it reduced pressure on the inflation forecasts in the budget by getting some of the energy bills lower than they would otherwise be.

A shopper holds asparagus spears at Paddy's Market in Sydney, Australia, on Oct. 22, 2022. Lisa Maree Williams/Getty Images