Thursday, 30 Nov 2023

Labor may be vindicated by the budget, but a surplus would be cold comfort for those grappling with the cost of living | Paul Karp

Labor may be vindicated by the budget, but a surplus would be cold comfort for those grappling with the cost of living | Paul Karp


Labor may be vindicated by the budget, but a surplus would be cold comfort for those grappling with the cost of living | Paul Karp

The treasurer, Jim Chalmers, came dangerously close on Friday to spoiling the surprise of a possible one-off surplus on budget night.

For those just tuning in to pre-budget news, the S-word must seem particularly jarring after months and years of chat about "structural challenges", which is code for "the budget is rooted".

We know there has been a substantial increase in revenue from previously underestimated commodity prices, lower unemployment and earlier than expected wages growth.

What we don't know, but senior economists such as Chris Richardson suspect is possible, is that this has been big enough to see the budget back in black.

Chalmers clearly meant "vindicated" in the sense that Labor intends to pull off the seemingly impossible task of delivering both: substantial cost-of-living relief, and a budget at or near balance, which won't add to inflationary pressures.

But just how much vindication should be felt must be judged against the decisions that the government has taken to get here.

While Chalmers promises some elements of the cost-of-living package will not be limited by age - hinting, perhaps, at one-off payments - we understand the jobseeker base rate will be increased only for the over 55s.

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