Treasurer Jim Chalmers reveals cost-of-living support on the way for Aussies in upcoming budget

Aussies doing it tough can expect some cost-of-living support in the upcoming budget, Jim Chalmers says, as he hosed down calls for an increase to welfare payments.

The Treasurer is putting the final touches on his third budget due to be handed down in the coming weeks.

He said taming inflation remained a major priority for the government but it wasn’t his sole focus – revealing there would be some relief on the way.

“Inflation has almost halved since we came to office. It has come off quite substantially. We’d like it to come off more,” Dr Chalmers told Seven.

“We know your viewers are under substantial cost-of-living pressure. There’ll be cost-of-living support in the budget.

“We’ll design it so it helps with inflation rather than makes the problem worse.”

But for people on Jobseeker and Youth Allowance payments, Dr Chalmers suggested they shouldn’t expect another increase.

“The budget will focus on other ways to provide help for people who are doing it especially tough,” he said.

In the lead-up to the budget, the government will have to walk a fine line between fending off criticism about its big spending commitments and managing inflation.

While inflation has eased down from 4.1 per cent in December to 3.6 per cent in March, prices for key services like education, health care and insurance remain stubbornly high.

It’s expected that the remaining progress needed to bring inflation back to the target band will take until 2025.

Dr Chalmers has vowed to keep running a “tight ship” in the hope of landing a second surplus.

A second surplus on May 14 is almost assured, with Department of Finance figures last week showing that the 2023-24 underlying cash balance to the end of March was $1.8bn in deficit – $4.1bn better than forecast in the mid-year economic and fiscal outlook.

A Deloitte Access Economics report released on Wednesday suggested the underlying cash balance could be as large as $13.4bn before returning to a deficit in 2024-45.

But Dr Chalmers insisted that estimate “dramatically overstates the revenue upgrade in the budget”.

“We won’t be getting anything like the sorts of revenue boost that they are guessing at in those reports today,” Dr Chalmers told ABC Radio.

“And indeed, deficits after that will be bigger than what they are suggesting, and that’s because the pressures on our budget intensify rather than ease.

“We want to get it into much better nick … if we can land that second surplus, we will, but that report today really quite dramatically overstates the revenue bump that people can expect to see in 13 days time.”