This year’s federal budget will include “temporary targeted measures” to help Australian families combat rapidly rising costs of living.
Treasurer Josh Frydenberg confirmed the relief measure in an interview with ABC Radio National this morning, ahead of a pre-budget speech to be delivered today to the Australian Chamber of Commerce and Industry.
The government is facing calls to ease the financial pressure being created by rising petrol prices, including by cutting or freezing the fuel excise and extending the low and middle income tax offset (LMITO) for another year.
Frydenberg declined to confirm whether or not the LMITO will be included in the March 29 budget when asked this morning, but reiterated that some temporary measures will be in the mix.
This reflects the government’s approach to economic management during the pandemic, said Frydenberg.
“We have been very careful throughout this crisis that we’re faced with the pandemic to ensure that our measures are temporary and are targeted,” he said.
“When the economy recovers we end those immediate emergency crisis settings.”
The Treasurer has argued today that Australia’s economic recovery is “well underway”, given the unemployment rate now sitting at 4%, and therefore the “it is time to move to the next phase of the budget strategy and that means stabilising debt and then reducing debt as a proportion of the overall economy”.
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It is essential that “crisis level economic support must not become entrenched”, Frydenberg will say in his speech today, according to The Guardian.
“With our tight labour market and our strong economic recovery, continued support at those levels would do more harm than good. It would risk putting further pressure on inflation, interest rates and cost of living,” he will say.
However, the budget will include “further measures to support families to meet the cost-of-living pressures, in a targeted and proportionate way”.
According to the Australian Financial Review, this could come in the form of one-off payments to low-and-middle income earners, pensioners and welfare recipients.
The confirmation comes as the Council of Small Business Organisations Australia has also released its wish-list for this year’s budget, calling for targeted, needs-based support in key areas such as workforce shortages, the digital economy and insurance.
The peak small business body is also calling for the government to avoid creating new compliance processes while small businesses recover from COVID-19, and to work with industry associations to determine the best ways to support small businesses.
BDO tax partner Mark Molesworth has previously said SMEs should not expect any major reforms in the pre-election budget, predicting that the budget will be “purely performative”.