Budget support measures will put Chalmers’ economics to the test

While the federal government says its budget will lower inflation, analysts counter that broad cost of living relief, such as energy rebates and tax cuts, could make things worse.

An expanded version of the energy bill relief delivered in last year’s budget and another boost to Commonwealth Rent Assistance are expected to help tame the consumer price index, Labor says.

Treasury forecasts in Tuesday night’s budget for 2024/25 show the cost of living measures will reduce inflation by about half a percentage point in the next financial year, possibly as early as Christmas.

Committee for Economic Development of Australia chief economist Cassandra Winzar said cost of living relief, including stage 3 tax cuts and energy bills support, that’s not means-tested risks working against the central bank.