<?xml version="1.0" encoding="ISO-8859-1"?> <docID>341031</docID> <postdate>2025-03-25 12:53:00</postdate> <headline>Labor lays election groundwork with budget promises</headline> <body><p><img class="size-full wp-image-341032" src="https://citynews.com.au/wp-content/uploads/2025/03/20250324180848264931-original-resized.jpg" alt="" width="900" height="600" /></p> <caption>Katy Gallagher and Jim Chalmers look over budget papers ahead of delivery on Tuesday. (Lukas Coch/AAP PHOTOS)</caption> <p><span class="kicker-line">By <strong><b>Kat Wong </b></strong>and <strong>Jacob Shteyman</strong> in Canberra</span></p> <p><strong>Cost of living, health and economic resilience in the face of US tariffs will be front-and-centre in a crucial pre-election budget.</strong></p> <p>With just weeks until Australians head to the ballot box, the budget, to be handed down on Tuesday, will be one of the federal government's last tests during this term.</p> <p>Labor is leaning into its core strengths by committing billions to Medicare, while addressing cost-of-living pressures - which will be a top election priority - all without fuelling inflation.</p> <p>"It's been a great task trying to land a 747 on a helicopter pad," Prime Minister Anthony Albanese told reporters in Canberra.</p> <p>The budget will also shore up Australia's economic defences against Donald Trump just days before the US president's reciprocal tariffs take effect.</p> <p>While Australia will not be directly impacted by the trade measures, escalating tensions are a concern and Treasurer Jim Chalmers said he had dedicated part of the budget to ensuring the nation was more resilient to "external shocks".</p> <p>"We're a very trade-exposed country - we're not uniquely impacted by these tariffs out of Washington DC, but we've got a lot of skin in the game," he told reporters.</p> <p>"Our budget tonight will be a platform for prosperity in a new world of uncertainty.</p> <p>"It will recognise that people need and deserve a bit more extra help when it comes to the cost of living".</p> <p>While the coalition wants a restoration of Australian prosperity, shadow treasurer Angus Taylor said the government had thrown out fiscal guardrails.</p> <p>"We need to see a budget where the economy grows faster than spending - it's simple," he told reporters.</p> <p>"When you do that, then you can bring down deficits, you can bring down debt, and you can get into the black."</p> <p>Australia is expected to hit a record level of debt in the economic papers but Dr Chalmers has spruiked the government's "responsible economic management" for limiting gross debt to $940 billion in 2024/25.</p> <p>While that's a record for the Commonwealth and up from the $906.9 billion figure in 2023/24, it's $177 billion lower than it was projected to be in a fiscal update before the last election in 2022.</p> <p>That means taxpayers will avoid having to fork out $60 billion in interest costs over the 11 years to 2032/33, despite borrowing costs rising since the last election.</p> <p>The government points to $95 billion in savings across its four budgets as proof it is responsible for the turnaround in the bottom line.</p> <p>But the budget "table of truth", as dubbed by economist Chris Richardson, tells a different story.</p> <p>This reconciliation table shows "parameter variations" - including factors outside the government's control, such as commodity prices - have contributed to more than 100 per cent of budget upgrades.</p> <p>In other words, the government's decisions have stood in the way of an even bigger improvement in the budget bottom line.</p> <p>Australia's federal debt is still fairly low compared to the rest of the world, at just over a third the size of the economy.</p> <div class="wire-column__preview__text" id="preview-body"> <p>But Australia's debt is expected to grow as public spending increases and a temporary boost to revenue fades, peaking at 37 per cent of GDP.</p> <p>Increasing pressures on the budget, like defence, health, aged care, the NDIS and interest payments are leading to a widening structural deficit, Deloitte Access Economics partner Stephen Smith said.</p> <p>He expects this year's underlying deficit to be slightly better than predicted in the December update at $26.9 billion.</p> <p>But Mr Richardson said the underlying deficit was becoming increasingly irrelevant because the government used an accounting sleight of hand to shovel more spending "off-budget".</p> <p>These measures are classed as investments which will supposedly make a return for the government, although in recent years have more often made a loss.</p> </div> </body>