By Aamir Latif
KARACHI, Pakistan (AA) - The government of Prime Minister Anthony Albanese presented its last budget Tuesday worth $730 billion with an unexpected tax cut and an extension of energy rebates before Australia goes to general elections in May, Australian Broadcasting Corporation reported.
The government is forecasting a deficit to the tune of $26.9 billion.
The Labor government's pre-election budget unveiled by Treasurer Jim Chalmers in Canberra, aims to win back voters distressed by sharp jumps in consumer prices, elevated interest rates and a housing shortage in the post-coronavirus era.
The government will face a deficit of A$42.1 billion ($26.5 billion), or 1.5% of gross domestic product, in the 12 months through June 2026, with a shortfall in fiscal year 2025 forecast at A$27.6 billion.
Chalmers said there are five priorities in the budget: supporting the recovery from ex-Tropical Cyclone Alfred, cost-of-living support, strengthening Medicare, investing in education and making the economy "more competitive, dynamic and productive.
“Every Australian taxpayer will get a tax cut next year and the year after,” Chalmers said in his budget address to parliament. “This will take the first tax rate down to its lowest level in more than half a century.
The government will reduce the lowest rate of income tax to 15% in mid-2026 from 16% now, and then to 14% in mid-2027.
He said the economy is set to grow from 1.5% this year to 2.5% by 2026-27, driven by a rebound in private sector demand.
Treasury forecasts lower peak unemployment at 4.25%, stronger job and wage growth and "faster-than-expected" inflation easing.
The Labor government, which is currently running neck-and-neck in opinion polls with the center-right opposition coalition, must hold an election by May 17.
No Australian prime minister has won consecutive elections for more than 20 years.