Treasurer Jim Chalmers has set out eight priorities for the next federal budget, while warning Australia is not immune to the ongoing volatility in global financial markets.
“Events of recent weeks show we now have more volatility in the global financial system, brought on by sharp and synchronised rate rises around the world,” he wrote in an opinion piece published in The Australian on Friday.
“We can’t hope to be completely unaffected by global financial frictions, but our banks are well-capitalised, well-regulated and well-placed.”
The 2022/23 budget to be handed down in May will need to strike the right balance between near term and longer term priorities, Dr Chalmers said.
The government’s books are well into the red and remain under pressure due to high government debt and the costly, longer term funding requirements of the National Disability Insurance Scheme, aged care, health and defence, he warned.
“That all means we have eight priorities for May,” Dr Chalmers said.
These include cost of living relief, driving supply-side growth, funding national security priorities like the AUKUS submarine project, and supporting the care economy while improving essential services and women’s economic participation.
The framing of the budget will also consider how to address entrenched disadvantage in the community, cleaning up unfunded programs and “restraint and responsibility across the board”.
“This is the best way to manage uncertainty abroad, pressures at home and maximise our opportunities in the years ahead,” Dr Chalmers said.
The treasurer’s remarks come ahead of a Reserve Bank of Australia board meeting on monetary policy on Tuesday.
The meeting is under the spotlight over whether the central bank again raises interest rates, or pauses in the wake of a recent moderation in inflationary pressures in the economy.
But annualised inflation remains high at about 6.8 per cent, compared to the RBA’s goal to maintain inflation within a target band of two to three per cent over the course of the economic cycle.
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