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Speaker 1: From The Australian. Here's what's on the front. I'm Christinamiot.

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Speaker 1: It's Thursday, December nineteenth. Alan Jones will plead not guilty

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Speaker 1: to thirty four indecent assault charges relating to incidents that

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Speaker 1: are alleged to have taken place over nearly two decades.

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Speaker 1: I will not be engaging in a running commentary in

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Speaker 1: the media, but.

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Speaker 2: I want you to understand this. These allegations are all

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Speaker 2: either baseless or they distort the truth.

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Speaker 1: The veteran broadcaster was swamped by media and protesters outside

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Speaker 1: Sydney's Downing Center Local Court on Wednesday, but he won't

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Speaker 1: return for future proceedings after New South Wales Chief Magistrate

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Speaker 1: Michael Allen excused him from appearing in person. That exclusive

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Speaker 1: story is live right now at the Australian dot com

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Speaker 1: dot au. The government was spend almost sixty billion dollars

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Speaker 1: this financial year and it could drag out the central

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Speaker 1: banks fight against inflation. The Treasurer says the cash splash

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Speaker 1: is unavoidable. But what does that actually mean. That's today's episode.

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Speaker 3: Well, we're rolling out very substantial cost of living help,

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Speaker 3: you know, because people are doing it tough.

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Speaker 1: On Wednesday, Jim Chalmers made it rain.

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Speaker 3: That's the motivation for the tax cuts, the energy bill relief,

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Speaker 3: the cheaper medicines, cheaper earlier childhood education, the student debt relief,

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Speaker 3: the rent assistance, and getting wages moving again. We've been

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Speaker 3: able to find room in our budgets for cost of

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Speaker 3: living relief.

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Speaker 1: In his mid year Economic and Fiscal Outlook Update, also

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Speaker 1: known as my IFO, the Treasurer announced government spending will

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Speaker 1: surge by just over fifty eight billion dollars in this

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Speaker 1: financial year.

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Speaker 4: This is a bit of a truth tonic. It tells

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Speaker 4: us where our economy is heading, and particularly it gives

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Speaker 4: us a really strong profile of the sea of red

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Speaker 4: that awaits any government over the next ten years.

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Speaker 1: Tom Ducivic is The Australian's Policy editor, so this is.

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Speaker 4: A pretty bracing set of numbers for anybody to look at.

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Speaker 4: Our revenue miracle of the past few years is over,

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Speaker 4: and now some of the forever spending pressures are coming home.

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Speaker 1: These new numbers will bump the government's share of GDP

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Speaker 1: that's gross domestic product, up to a level we haven't

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Speaker 1: seen since the recession of the early nineteen eighties and

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Speaker 1: the coronavirus pandemic, and it means we're staring down the

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Speaker 1: barrel of a decade of record budget deficits totally more

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Speaker 1: than one hundred and forty billion dollars. But this uptick

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Speaker 1: in spending does doesn't include Labour's Future Made in Australia

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Speaker 1: Net zero investment scheme, or it's sixteen billion dollar plan

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Speaker 1: to slash student debt. So what is the government splashing

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Speaker 1: all that cash on. One of the most expensive items

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Speaker 1: on the list is reforms to the National Disability Insurance Scheme,

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Speaker 1: which the Treasurer says is unavoidable. There's also funding for

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Speaker 1: welfare payments and pensions, plus an unexpected jump in demand

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Speaker 1: for government services like medicare.

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Speaker 3: One of the big drivers of the extra spending in

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Speaker 3: the budget update today, as you know, and which is uncontested,

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Speaker 3: is indexation of things like the age pension, working age

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Speaker 3: payments and the like.

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Speaker 1: And there's a sneaky five point five billion dollar election

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Speaker 1: war chest which will be used for cost of living

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Speaker 1: relief measures likely to be announced in the run up

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Speaker 1: to the next federal election. Jim Charmers deployed another of

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Speaker 1: his trusty catchphrases to explain the government's fifty eight billion

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Speaker 1: dollar blowout.

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Speaker 3: Even if you look at the net policy decisions, you know,

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Speaker 3: seventeen and a half billion dollars in net policy decisions.

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Speaker 3: We think something like ninety four percent of that is

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Speaker 3: a combination of genuinely unavoidable already provisioned cost of living

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Speaker 3: or supported in a bipartisan way.

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Speaker 1: But what does that actually mean.

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Speaker 4: It's unavoidable in the sense that governments make choices, and

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Speaker 4: once they make those choices, they decide on certain forever

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Speaker 4: programs basically payments on social welfare for programs, and some

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Speaker 4: of those are linked to inflations, so it means that

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Speaker 4: you have to do indexation. Sometimes you win on indexation

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Speaker 4: in the sense that you've got to return a certain

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Speaker 4: amount to the people receiving those payers, but at the

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Speaker 4: other end, it punishes every wage urner through what we

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Speaker 4: call bracket creep or fiscal drag, where wage inflation just

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Speaker 4: basically pushes our average tax rates up, and so the

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Speaker 4: governments tend to be winners from that, and they get

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Speaker 4: a really big boost from revenue, so the two things

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Speaker 4: net each other out. But in this case, Charmers is

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Speaker 4: just using a big excuse to try and point to

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Speaker 4: those factors outside of his control as driving it. But

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Speaker 4: that's not the full picture. The full picture is that

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Speaker 4: in the main the government's own decisions on spending is

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Speaker 4: what is driving this blowout in the budget.

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Speaker 1: Of course, labor is still waging a war against stubborn

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Speaker 1: inflation and desperately hoping the Reserve Bank will cut interest

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Speaker 1: rates before the next election in a bid to win

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Speaker 1: back the trust of voters struggling under a cost of

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Speaker 1: living crisis. It says pumping an additional fifty eight billion

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Speaker 1: dollars into the economy won't exacerbate the problem or prolong

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Speaker 1: the agony.

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Speaker 3: The Reserve Bank governor has herself said that public demand

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Speaker 3: is not the main game when it comes to inflation

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Speaker 3: and interest rates. And what we've been able to do

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Speaker 3: with the very responsible way we've been managing the budget

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Speaker 3: is we've seen inflation come off substantially. When we came

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Speaker 3: to office, it was money.

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Speaker 1: But history tells us that the more money you put

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Speaker 1: into people's pockets by way of bill relief and subsidized services,

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Speaker 1: the more they'll spend on necessities like food and rent.

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Speaker 1: But the more we pump into the economy, the harder

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Speaker 1: it is to bring inflation down.

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Speaker 2: So what gives the government here is been coy and

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Speaker 2: not quite telling the full truth on this because it's

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Speaker 2: own spending in this year, after you account for inflation

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Speaker 2: is going to go up by five point seven percent.

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Speaker 2: That's the kind of thing you do when you're in

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Speaker 2: a recession or facing a crisis.

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Speaker 4: But we're not there. Our unemployment rate is low, the

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Speaker 4: economy is still growing. We've got new people coming into

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Speaker 4: the country and making the size of the economy larger.

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Speaker 4: But what you've also got is state and territory governments,

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Speaker 4: some of them who've faced elections, have been spending like

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Speaker 4: crazy on all sorts of things like public transport concessions,

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Speaker 4: energy bill relief. Those sorts of things just pumps more

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Speaker 4: money into an economy. So as the Great Chris Richardson says,

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Speaker 4: that's more dollars chasing the same amount of goods in

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Speaker 4: an economy, and prices rise, and that pushes up inflation,

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Speaker 4: and that keeps interest rates high.

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Speaker 1: Coming up the treasurer is chickens come home to roost.

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Speaker 1: Since winning government in twenty twenty two, Jim Chalmers has

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Speaker 1: been quick to take credit for Australia's economic wins.

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Speaker 3: For the first time in almost two decades, our Labor

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Speaker 3: has delivered back to back budget surpluses. This is a

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Speaker 3: really important demonstration of them.

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Speaker 1: And he hasn't hesitated to blame the opposition for leaving

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Speaker 1: the government's books in what he says is a bad

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Speaker 1: way the Labor government.

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Speaker 3: When we came to office, these were two big liberal

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Speaker 3: deficits and we've managed to turn them into two big

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Speaker 3: labor surpluses.

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Speaker 1: But deficits projected to plague the budget over the next

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Speaker 1: several financial years means it's getting harder for Jim Chalmers

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Speaker 1: to shirk responsibility.

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Speaker 5: After three budgets and potentially a fourth if Labor do

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Speaker 5: hand down a budget on March twenty five next year,

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Speaker 5: Charmers can no longer blame the coalition.

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Speaker 1: Jeff Chambers is the Australian's chief political correspondent.

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Speaker 5: I think for voters and business owners and others doing

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Speaker 5: it tough out there, this is now Labour's cost of

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Speaker 5: living crisis and housing affordability crisis to own, and it's

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Speaker 5: going to be one of his great political challenges is

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Speaker 5: to respond to that. So there's all types of high

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Speaker 5: level players going on, but people should be expecting from

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Speaker 5: both sides some really big promises, and the pressure for

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Speaker 5: the coalition is to, instead of sitting in that rhetorical space,

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Speaker 5: to actually put some meat on the bones and talk

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Speaker 5: about where they will find savings. And Angus Taylor today,

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Speaker 5: again concerned about the political blowback, says it's not about austerity,

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Speaker 5: it's about restraint.

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Speaker 1: Ahead of Wednesday's MAIFO announcement, the treasure that characterized Labour's

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Speaker 1: almost sixty billion dollar blowout as slippage.

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Speaker 5: If this is Jim Chalmers's final budget announcement before a

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Speaker 5: federal election, he'll be going to an election without being

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Speaker 5: able to champion those surpluses, but rather defending a decade

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Speaker 5: of deficits and higher spending under labor. So they're saying

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Speaker 5: that they need to spend on unavoidable automatic spending. Some

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Speaker 5: of that is highly questionable given the links to labor policy,

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Speaker 5: but it comes down to a matter of whether or

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Speaker 5: not the government has the courage politically to rain in

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Speaker 5: some of that structural spending. It seems like they don't

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Speaker 5: have that appetite and that's where the pressure goes towards

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Speaker 5: the coalition to see what their plan is. But ultimately

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Speaker 5: today's my AFA was a really difficult one for Jim

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Speaker 5: Charmers to shine some positive light on.

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Speaker 1: Jeff Chambers is The Australian's chief political correspondent and Tom

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Speaker 1: Ducivic is our policy editor. You can read all our

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Speaker 1: reporting and analysis of the government's media budget update right

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Speaker 1: now at the Australian dot com dot au