Treasurer Jim Chalmers has handed down his third Budget with a second surplus, again driven by higher commodity prices, low unemployment, and wage growth.

The media spin in the week preceding the Budget was for a balancing act between “cost of living” support for individuals whilst avoiding inflationary pressures. The Treasurer was bold in his predictions that his Budget would not drive inflationary pressures and has provided sound bites that the RBA are incorrect with inflation forecasts.

The timing and application of the cost-of-living measures would appear to show this is a pre-election budget, designed to give voters a stimulus prior to the next Federal election. The energy bill relief measure is a short-term fix designed to reduce inflation and give the RBA room to move on interest rates generating a feel-good factor in an election year.

Click to view our expert analysis – ESV Budget Special May 2024