The budget explained in seven charts

The national economy remains sluggish and dogged by high inflation, and the outlook for the world is fraught with uncertainty. Meanwhile,Jim Chalmers’ third budget attempts to tread this difficult line by providing cost-of-living relief to families without adding to the challenge of bringing inflation or debt under control.Last year, the government announced Australia’s first budget surplus since 2007–08, thanks largely to near-record Chinese demand for coal and iron ore.

Consequently, the government’s debt, representing the cumulative impact over time of budget deficits, is expected to continue rising over the budget period. The government expects to pay a total of about $80.1 billion in net interest payments over the next four years. The government remains particularly optimistic about the inflation outlook. It claims its cost-of-living policies – including $3.5 billion worth of power bill relief – will knock three-quarters of a percentage point off inflation this year and half a percentage point off next year.

By historical standards, that’s a lot. In fact, leaving aside the big-spending COVID years, spending has never been that high since, in proportional terms, the mid-1980s.Just over a third of total spending is expected to go towards social security and welfare, with about 15 per cent going towards health.

When it comes to social security and welfare, assistance to the aged is expected to cost almost $101 billion over the coming financial year, assistance to people with disabilities $84 billion, assistance to families with children almost $47 billion and assistance to sick/unemployed people $16 billion.

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