Jim’s $21 billion repair job: Labor ready for tough round of budget cuts

The Albanese government believes itself ready to launch into the difficult task of budget repair after inheriting a structural deficit and record levels of debt.

Oct 24, 2022, updated Oct 24, 2022
Federal Treasurer Jim Chalmers. (AAP Image/Darren England)

Federal Treasurer Jim Chalmers. (AAP Image/Darren England)

Finance Minister Katy Gallagher says Labor has spent its first months delivering on a promise to undertake a deep audit of spending to identify where money can be returned or redirected.

Tuesday’s budget will include over $21 billion in savings and decisions to redirect existing spending, she said.

Examples include the retrieval of $6.5 billion from infrastructure projects to better align the investment with construction market conditions.

A further $3.6 billion will come from slashing expenditure on external labour, advertising, travel and legal costs.

More than $2 billion will be shaved from various grants programs.

Gallagher said funding some big infrastructure projects would be delayed beyond forward estimates, with some experiencing issues accessing materials and workforce.

“It’s very sensible to look at where we can find some reprofiling but there will also be some genuine savings,” she told the ABC.

“It’s not exclusively infrastructure, we are finding savings across government, we have gone to every single department and asked them to look at their programs to identify those that don’t need to be done any longer or don’t align with government priorities.”

Gallagher flagged “significant investment” to repair flood damage, and backed Emergency Management Minister Murray Watt’s flagging of Australia building a semi-professional disaster relief workforce.

“The reality is we’re seeing more and more (natural disasters), more is being asked of volunteers responding to these emergencies and we have to be looking forward and looking at how we can deal with this in the best way,” she said.

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Gallagher said there would likely be more emergencies due to the impacts of climate change and Australia needed to ensure emergency responses were resourced properly.

Shadow treasurer Angus Taylor said, on the contrary, Labor had been gifted the lowest unemployment rate in decades, economic growth over three per cent and an improving budget bottom line by the coalition.

He said a high-taxing, high-spending Labor budget would only make the Reserve Bank’s job harder and that Chalmers’ challenge would be a test of his willingness to put Australians first.

“Budgets are statements of a government’s priorities and … this new Labor government’s true intentions will be exposed,” he said.

“In a rapidly changing economic environment, Labor must use the budget to deliver a coherent plan to deal with the current cost of living crisis which is very real and painful for so many Australian families.”

Taylor urged Chalmers to put downward pressure on inflation and interest rates without increasing taxes and deliver relief to supply side pressures in the economy by increasing productivity and participation.

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