The treasurer, Jim Chalmers, has accused the Coalition of “downward envy” as the opposition considers whether to oppose Labor’s modest increases to welfare in Thursday’s budget reply.
Speaking at the traditional post-budget National Press Club lunch on Wednesday, Chalmers reminded the opposition that “the broader Australian community … funding help for the most vulnerable” is “the whole basis of social security”.
The government is on the defensive over Tuesday’s budget, fending off what Anthony Albanese described as “a great contradiction” of criticism that, on the one hand, it didn’t offer enough cost-of-living relief and on the other that it might increase inflation.
The opposition has signalled that it will support key elements of Labor’s cost-of-living relief package aimed at middle Australia, including up to $500 to pay energy bills and incentives for GPs to lift bulk-billing rates.
But the opposition leader, Peter Dutton, has so far not committed to supporting the $40 a fortnight increase in jobseeker unemployment payments.
On Wednesday, Dutton told the ABC “there are millions of families who aren’t getting any assistance in this budget who thought they were”.
Dutton claimed that “an average family with a mortgage and three children is $25,000 worse off under Labor in this budget” – an apparent reference to the increased cost of mortgage repayments, attributable to 11 consecutive interest rate rises, not the federal budget.
Pressed on whether the opposition would support the jobseeker increase, Dutton said: “We’ve spoken a lot about trying to provide support to people on lower incomes, but there are millions of Australians who have missed out in this budget – they’re the ones who are going to be hurting.”
Dutton said that “of course” single mums deserve all the help they can get, adding that “lots of people deserve support because Labor has created a huge cost-of-living crisis and, in this budget, they put upward pressure on interest rates”.
In question time, the shadow treasurer, Angus Taylor, noted that senior economist Chris Richardson had suggested Tuesday’s budget had “notably raised the chance” the Reserve Bank would lift interest rates further.
Earlier, at the National Press Club, Chalmers said that the “restraint” shown in the budget was “key to dealing with the inflationary challenge”.
Chalmers said the budget was “contractionary” – because the government projects a $4.2bn surplus in 2022-23 – “when inflation is at the highest this year”.
“The [result is] to improve the fiscal position by around $125bn over two years since coming to government. And this represents a turnaround of around 3.6% points of GDP in 2022-23, [and] a 1.8% turnaround in the next [year] as well.
“All this means that our fiscal position is clearly not working against the Reserve Bank.”
Chalmers said the government wants “to support people who are doing it especially tough at the same time as we support the legitimate aspirations of middle Australia”.
He cited comments by Taylor “that what worried him about our changes in social security was that it meant that the broader Australian community would be funding help for the most vulnerable”.
“That is the whole basis of social security,” Chalmers said, to applause in Parliament House’s great hall, packed with ministers, department heads, chief executives and advocates who had called for increases in welfare.
“And I think that our country is better, frankly, than the kind of downward envy that we hear about from time to time from people like Angus Taylor.
“I think the broader Australian community want a bit of help, they’re getting help from us in the budget, but I think there’s a generosity inherent in the Australian character that says if you are doing it the toughest, you need the most help.”
The Greens and the independent senator David Pocock have led calls for the budget to show greater generosity to vulnerable Australians, citing a jobseeker increase that amounts to $2.86 a day and an increase in rent assistance worth $1.12 a day.
As Labor and the Greens face a standoff in the Senate over the government’s housing bill, the Greens leader, Adam Bandt, said that “cost-of-living measures in the budget don’t address the scale of the rental, housing and poverty crises the country is facing”.
“Capital city rent increases last year were 10 times the increase in rent assistance.”
Pocock said that “almost a year into their term, and despite a windfall in both political and budget capital, we’ve seen yet another budget that’s a step in the right direction but lacking in ambition”.
“This is against the backdrop of an acute cost-of-living crisis where more and more Australians are struggling to afford the cost of essentials and make ends meet.”
Albanese said the government had “got the balance right”.
“We understand that people are under pressure,” he told the ABC. “But we needed to make sure that it was a responsible budget. So, this $40 increase is something that will make a difference to people.”
After the treasurer revealed the stage-three tax cuts – flattening the marginal tax rate for everyone earning between $45,000 and $200,000 – would cost $69bn over four years, the government came under pressure to redesign them to repair the budget.
Chalmers said he supported returning increased income tax as people earn more “when [we] can afford to” and it was “too often lost that the tax cuts kick in at $45,000”.
Asked about retaining the 37% tax rate, which applies to those earning $120,000 to $180,000, Chalmers replied: “If your question is: ‘is there more than one way to [return bracket creep]?’ – of course there is.
“There is relief in there for people on lower and middle incomes as well as people on higher incomes.
“Our position on the tax cuts hasn’t changed.”
