Liberals’ ‘booby traps’ to navigate

INFLATIONARY pressure, growing structural deficits and “booby traps” have left the federal government searching for “sensible savings” ahead of the upcoming budget.

Finance Minister Katy Gallagher refused to label the decisions being weighed up by the government’s razor gang as budget cuts when asked on Thursday.

“The pressures coming towards the budget are increasing, not decreasing,” she said.

“So that requires us to have a look at current expenditure, where it is, what the priorities are, where some of that can be reprioritised into these new and emerging pressures.

“But also, there are areas where we can make sensible savings.

“I’m not going to pretend it’s easy, it is not easy.”

The government is due to hand down its second budget in May. Treasurer Jim Chalmers on Wednesday said the government would “look for opportunities to trim spending more substantially”.

Ahead of the October budget, Labor found more than $20bn in savings and banked a majority of the additional revenue brought in by high commodity prices.

Senator Gallagher said the pair were “determined” to deliver a restrained budget but lashed the former government for leaving policy potholes.

“We’ve got a whole range of booby traps that were left by the former government for us that we are working through now,” Senator Gallagher said.

“You know, this list of terminating pressures or programs that aren’t terminating for a start, which certainly dressed up how the budget balance looked over time.”

While Australia is expected to have passed the inflation peak, the government does not want to flame pressures by ramping up spending.

Inflation reached a threedecade high of 7.8 per cent in December, well above the Reserve Bank’s 2 to 3 per cent target rate.

The central bank has since handed down 10 consecutive hikes since May, raising the official cash rate to an 11-year high of 3.6 per cent this week, in a bid to curb skyrocketing inflation.