Jim Chalmers: Fiscal warning on Australian debt as interest rates soar
Jim Chalmers released a chilling debt message and told Australians to be prepared for some “confronted” budget figures.
Treasurer Jim Chalmers has warned Australians to prepare to “face” the news when he unveils the state of the nation’s finances next week.
Soaring interest rates on record levels of public debt are expected to punch a $13 billion hole in the budget.
Speaking to reporters in Canberra, Mr Chalmers said the government had inherited “the trickiest set of economic circumstances” in living memory.
“When it comes to the trillions of dollars of debt that we inherited from our predecessors, it’s getting more and more expensive for us,” he said Monday.
“Every dollar they borrowed now costs more to maintain. It’s just reality.
Mr Chalmers is expected to provide an update on the federal budget on July 28, once Parliament resumes.
Essentially, the government faces the same interest rate punch as the everyday Australian on their mortgage payments.
When the budget was tabled in March, interest rates were expected to average 2.2% over the next four years.
But an uncertain global economic environment prompted the Reserve Bank of Australia to successively raise interest rates in a bid to curb rising inflation.
The federal government is set to pay more on its own loans as it simultaneously tries to claw back funds and offer cost-of-living relief to Australians.
Mr Chalmers said on Monday he would continue to say candidly that he expected the fuel excise duty cut to end at the end of September as planned.
“Obviously we’re always trying to do the right thing for people and we’ll take economic conditions into account when the time comes,” he said.
“But my expectation, and the expectation that I would encourage people to have, is that we can’t afford to continue this relief in gas prices indefinitely.”
He said the Albanian government would try to help people through this “difficult time” but debt levels meant it could not “do everything we would like to do”.
“And so we have to prioritize and our priority is childcare and medication,” he said.
Deputy Treasurer Stephen Jones warned earlier Monday that the federal government will soon be spending as much on interest as on Medicare.
“We are going to (have) a tough budget statement and a tough budget coming in October because we cannot, as a new government, just throw money away and not be blind to the consequences,” he said. he declares.