Stop the spend to relieve inflation

Australia’s gross debt is still predicted to rise above $1 trillion, Treasurer Jim Chalmers has flagged, as the Albanese government faces calls to cut spending to avoid exacerbating inflationary pressures.

Speaking ahead of the May 14 budget, the Treasurer did not rule out an increase in gross debt beyond $1 trillion but said Labor had lowered Australia’s liabilities.

“We’ve got those debt levels down … about $150bn lower than what we inherited from our predecessors,” Dr Chalmers told Sky News’ Sunday Agenda.

With a rapid improvement to the budget bottom line thanks to strong commodity prices and near record-low unemployment, Dr Chalmers said taxpayers would save approximately $80bn in interest repayments over the next decade due to downgrades in government debt.

Despite inflation still being too high at 3.45 per cent, Dr Chalmers said the government would provide cost-of-living relief alongside the stage 3 tax cuts that will come into effect on July 1.

But motorists won’t receive additional relief, with Dr Chalmers saying the budget would not “chase the petrol price up and down” via a temporary cut to the fuel excise.

The focus would instead centre on a suite of other measures that will act as less of a drag on the budget bottom line.

Shadow Treasurer Angus Taylor said the government was spending too much.

“They should make sure that the economy grows faster than spending. And that’s the exact opposite of what we’ve seen in the last two years,” Mr Taylor told ABC Insiders.

“So to put this in perspective, we’ve seen $209bn of additional spending from Labor since they came to power.”

Dr Chalmers on Sunday said there would be “substantial” measures in the budget to help, including with power bills.

“It will be good for us, for Middle Australia, good for families and it will recognise the pressures that people are under,” Dr Chalmers told Sky News.