Australia’s Finance Minister Jim Chalmers said the government would improve budget sustainability during the current parliamentary term despite rising public debt and government spending on welfare.
After the first budget was announced on October 25, the treasurer said Governments have had to make tough decisions to reduce the budget deficit and fund key welfare services such as Medicare and the National Disability Insurance System (NDIS).
In an interview with the Australian Broadcasting Corporation, Mr Chalmers said the government would need to address a number of structural issues within the budget. Said it would be completed.
“We have shown that we can act smart on all fronts, including self-restraint, spending cuts, and smart tax reform.” He said.
“We can make the budget more sustainable. That will be the two or three remaining budget challenges for Congress this term.”
One area Chalmers said his department is working on is the Petroleum Resource Rent Tax (PRRT).
According to 2022-2023 budget documentPRRT revenues were expected to increase by $200 million (US$128 million) in the current fiscal year.
However, the government forecast that revenues from oil will fall by $450 million over the four years from 2025 to 2026.
The Treasurer acknowledged that the government had not come up with options to change the PRRT arrangement, but given the recommendations of the previous Morrison administration, his department has resumed reviewing the PRRT’s tax points.
“We want Australians to get a good return on their resources,” he said.
“We have to balance our investment in this sector. Once we receive that advice from the Treasury, we will engage with it in a meaningful way.”
Government to ensure sustainability of NDIS
Treasurer acknowledged NDIS costs have risen significantly, while government confirms spending is sustainable and Australia sees value in every dollar spent on welfare services He said that he is reviewing NDIS to do so.
The Budget forecasts that NDIS costs will rise from $76.3 billion in 2021-2022 to $102.5 billion in 2025-2026.
But Chalmers said the scheme would have a positive impact on the Australian economy, citing figures from the National Disability Insurance Agency, including improved employment for parents of those who benefit from the scheme.
“First and foremost, we want to serve Australians with disabilities and their families. It is important that we do that.” He said.
“Part of ensuring that is making sure the scheme is sustainable. [NDIS Minister Bill Shorten] What you do is very important. ”
Economists warn of risk of rising government debt
Despite the positive outlook for Treasure’s budget spending, some economists say Australia will either have to cut spending on welfare or, given rising interest payments on federal government borrowings. warned that he would drown in debt.
Gene Tunney, director of Adept Economics, previously told the Epoch Times that governments could introduce NDIS, pay parental leave or provide childcare subsidies if interest claims rise. He said he couldn’t.
He noted that the cost of servicing government debt will rise to $35.3 billion over the next five years from 2025 to 2026, adding more pressure as bonds mature.
“So it’s a problem. In the long run, you can’t have a situation where you’re running a deficit and piling up debt while increasing interest,” he said.
“It’s not going to work and they’re going to have to make some tough decisions.”