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Budget 2023: Jim Chalmers ‘history-conscious’ in passing record surplus


Treasurer Jim Chalmers says he is “aware of history” in possibly passing on the first surplus in 15 years, but his eyes are “turned to the future”.

While the Greens accuse Labor of designing the budget surplus for “political reasons”, the coalition says the only reason the budget has improved so significantly is because of them.

Tuesday’s budget will forecast a $4 billion surplus for the financial year – the first surplus since 2007/2008, before returning to a deficit for the next four years.

Dr. Chalmers said while there is an expected $143 billion improvement over the four years to 2025-2026, it was better to be cautious than to celebrate.

“It’s not my style to come back in black mugs like my predecessor did. I honestly thought that was humiliating for the liberals and the nationals,” he said.

“I’m much more careful and conservative.”

Greens spokesman Nick McKim said the government should not brag about the surplus.

“This surplus was designed by Jim Chalmers for political reasons,” he told ABC Radio.

“And again, what we see in this budget is a rhetorical admission that the government needs to do more to help people who are really struggling, but they are not taking the action they need to actually provide help to the extent that badly needed.”

Shadow treasurer Angus Taylor said the government should not focus on a short-lived surplus, but ensure its budget did not increase inflationary pressures.

“Once the pandemic was over and the economies of NSW and Victoria opened at the end of 2021, the budget was balanced — right through to (our last) budget,” Taylor said.

He said Labor had inherited an “incredibly strong position base”, as well as a strong labor market and a strong commodities sector.

“A drover’s dog could produce a surplus, with the record revenue being paid to Labor as part of this budget,” he said.

Dr. Chalmers said the budget position “would not be possible if we copied the approach of our predecessors”.

“Or if we hadn’t imposed the kind of discipline on the budget that would allow us to take care of people in the here and now from that stronger foundation, while also investing in their future,” he said.

But Mr Taylor said a strong post-Covid economic recovery was “always the plan”.

“It was really a V-shaped recovery, that was always the plan. Now the challenge is this, this is the test for Labor – to deal with these inflationary pressures,” he said.

“By making sure that spending is growing slower than the economy and that budgets are balanced in the medium term, not just the short term, and that those inflationary pressures are addressed now.”

Mr Taylor also said the budget would be “divisive”.

Dr. Chalmers said Mr Taylor was “not a serious person”.

“He doesn’t make a serious contribution and that’s why nobody takes him seriously,” said the treasurer.

Canavan’s coal message

Meanwhile, Senator Matt Canavan of the Nationals has spoken out about the government’s treatment of the resource sector in the budget, bringing a chunk of coal to his morning media appearances to get his message across.

“This is your surplus,” he said, holding the piece of coal in a stunt reminiscent of then-treasurer Scott Morrison.

“This is the only reason why he gets a surplus.”

When asked if coal was the reason for the surplus, Mr Chalmers said “of course not”.

“It is clear that the resource sector is a major contributor to the budget, but it is not the largest contributor,” he said.

“About one-fifth of the upward revision in earnings comes from higher commodity prices.

“Twice that is due to a much stronger labor market and the fact that after a decade of wage stagnation we are seeing the welcome start of wage growth and that has made a much bigger contribution to the improvement.”

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.