Federal Treasurer, Jim Chalmers, will hand down the 2023-24 Federal Budget amid an increasingly uncertain and challenged global economy. Inflationary pressures are proving stubborn, interest rates are rising and the global financial system is under increasing strain.

Despite these pressures, higher than forecast commodity prices, an outperforming labour market and strong company profits have lowered the deficit in the short-term. But these favourable conditions are unlikely to continue. Higher costs of living and rising interest rates are starting to dampen spending and the broader economic environment is weighing on business activity.

This year’s Budget and the policy decisions that follow must enable the nation to weather the difficult fiscal and economic period ahead, moving in lockstep with monetary policy to bring inflation under control, while still supporting the most vulnerable in the community. Beyond this, the government must lay the foundations on work to close the stubborn fiscal gap that will otherwise persist over the next decade.