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Budget 2023: $17.8 billion in savings and reprioritisation


Tuesday’s budget will reveal that more than $17 billion in savings will be diverted to fund a series of higher-priority measures.

While the treasurer has been tight-lipped about whether he will hand over the first budget surplus since Kevin Rudd was prime minister, new details have emerged about the state of the country’s treasury.

The $17.8 billion in “savings and reprioritisations” follows the $22 billion figure announced in the October budget. The pinnacle will allow Labor to fund higher quality investments and priorities.

Of the savings in this budget, $7.8 billion is within the Department of Defense alone, and the money will be reinvested as part of the government’s response to the Defense Strategic Review.

Further savings and reprioritizations have been identified across government agencies and will be explained on Tuesday.

Treasurer Jim Chalmers and Treasury Secretary Katy Gallagher have reiterated in the year since they took office that it is “difficult” to restore the budget, having inherited a significant structural deficit and debt of more than $1 trillion .

They have warned that even if there is a surplus in the short term, the medium term will still be plagued by significant tensions.

Senator Gallagher said the numbers showed the government’s determination to make the budget more sustainable.

“Our approach to strong budget management is in stark contrast to the tricky budgeting tactics and dishonesty of the former government,” she said.

“Labour is open with the Australian people about the true state of affairs and the decisions we are making to support those in need and grow our economy.”

“The $17.8 billion is in addition to the $22 billion in savings and reprioritisation we found in the October budget and demonstrates Labor’s commitment to the continued task of managing the budget responsibly and in the interest of to manage all Australians.”

While Dr Chalmers would not reveal on Sunday whether the budget would briefly turn black again, he said the “substantial improvement” in short-term budget outcomes was mainly driven by a strong job market.

It is clear that about 40 percent of the turnover increase is due to significant employment growth and rising wage growth; while 20 percent is attributable to higher commodity prices.

The remaining 40 percent is the result of increased revenues from other sources.

Dr. More broadly, Chalmers said the government’s “responsible approach” to its first two budgets had made a significant difference.

“My focus is really to try and get the budget as best as possible,” he told Sky News.

“There will be substantial improvement in the short term, but after that it gets difficult because the pressure builds instead of calming down.”

Joanna Swanson

Joanna Swanson is Europe correspondent at the Thomson Reuters Foundation based in Brussels covering politics, culture, business, climate change, society, economies and inclusive tech. With specific focus in breaking news, she has covered some of the world's most significant stories.