Treasurer Jim Chalmers attributes lower spending to a $15.8 billion budget surplus

Treasurer Jim Chalmers sees spending restraint as the only reason the federal budget achieved a larger-than-expected surplus despite falling tax revenues.

On his return to Australia following high-level economic talks in China, Dr. Chalmers announced on Monday that final budget numbers for 2023-24 included a surplus of $15.8 billion.

The headline figure – Labour’s second consecutive surplus – is $6.4 billion above the $9.3 billion surplus forecast in the May budget.

Dr. Chalmers said the better-than-expected figures were “entirely” due to lower spending, with income tax and corporation tax revenues below forecast levels in May.

The West believes the recent drop in commodity prices had no significant impact on corporate tax revenues through June 30.

The figures are being used to counter claims, including from the opposition, that excessive government spending is to blame for stubbornly high inflation that is forcing the Reserve Bank to keep interest rates unchanged.

Dr. Chalmers said posting successive surpluses was a type of budget management that was “unrecognizable” to the previous coalition government.

“We are the first government in almost two decades to post consecutive surpluses,” he said.

“These surpluses will help pay down the Liberals’ debt, help fight inflation and will not come at the expense of reducing the cost of living for people who are struggling.

“Our larger-than-expected surplus last year was driven entirely by lower spending, with lower tax revenues as well.”

The Treasurer was buoyed last week by news of major stimulus measures to reverse China’s ongoing housing market downturn, which has caused iron ore prices to plummet.

Dr. Chalmers and Finance Minister Katy Gallagher will release the final budget figures at a news conference in Canberra, where the pair will be questioned again about Labor’s stance on negative gearing.

Prime Minister Anthony Albanese has confirmed Labor will not take action to withdraw the concessions until the next election, but has not ruled out seeking changes after that.

Dr. Chalmers said on Friday it was “not unusual” for treasurers to seek advice on controversial policies – comments that were interpreted as confirmation that he was seeking modeling.

Senior Labor sources rejected this interpretation, leaving it unclear who exactly had requested the advice.