Treasurer Jim Chalmers declines to answer whether combined budget deficits will increase in MYEFO update

Jim Chalmers has refused to say whether the combined $122.1bn deficits forecast over the next four years will increase in the December budget update, which is set to be released on Wednesday.

Figures from the May budget forecast a slim surplus of $9.3bn for the 2024-25 financial year, followed by four consecutive deficits for $28.2bn in 2025-26, $42.8bn in 2026-27, $26.7bn in 2027-28 and $24.3bn in 2028-29.

Appearing on Sky on Sunday, the Treasurer declined to directly answer whether the Mid-Year Economic and Fiscal Outlook (MYEFO) would reveal an increased total deficit over the next four years, however confirmed the forecasted figures would be greater in some years.

“You’ll see all the numbers on Wednesday. There hasn’t been slippage in every year,” he said.

“We’ve been able to do a little bit better in the near term, but there’s been some slippage for reasons that we’ve been upfront about.”

This was due to pressures such as slowing growth, and lower than forecasted mining exports, plus “variations in spending” on Medicare, early childhood education, and natural disasters, he said.

The government also revealed on Saturday that upward revisions on estimates for veterans’ payments would also add $1.8bn to the budget.

“That’s because we’re working through the backlog that we inherited from the Coalition,” he said.

“(We’re) getting veterans the help that they need and deserve but it does come with another $1.8bn price tag, and that will be one of the very substantial pressures in the mid year budget update, one of a handful of quite significant pressures that we’ve had to adapt.”

Dr Chalmers also played down speculation Anthony Albanese could call an election prior to the March 25 budget, so Labor can avoid criticism of the forecasted deficits during the campaign.

“Of course, I see the commentary, and I see that the pundits and all of the rest of it, speculating, as they always do it, understandably, about the timing of the election,” he said.

“The timing of the election is up to Anthony. From my point of view, and (Finance Minister) Katy Gallagher’s point of view, we’re certainly preparing for a budget in March.”

He added that work on the proposed March budget was already underway.

“We’ve been working simultaneously on the mid-year budget update, which we released on Wednesday, and the budget that we’re preparing for March,” he said.

“We work around the clock and around the year on these budgets.”

Appearing on Sky following Dr Chalmers, Shadow Treasurer Angus Taylor said the budget was “falling off a cliff,” taking aim at Labor for increased government spending and a record seven consecutive quarters of per capita recession.

“This is a disastrous budget situation which reflects the government taking us on a pathway to economic ruin,” he said.