Australia’s Labor government has unveiled its annual budget, featuring income tax cuts, student debt relief, and increased defence spending as it prepares for a closely contested general election. The government, expected to announce the election date by the end of the week, recorded a US$17 billion spending deficit while introducing a series of tax cuts and economic incentives aimed at securing voter support.
The budget includes plans to overhaul the country’s military and invest nearly US$2 billion in developing a domestic “green” metals industry. Treasurer Jim Chalmers emphasized that the measures are designed to strengthen the economy against global uncertainties, including rising US tariffs. He stated that the budget represents a strategy for long-term prosperity amid a changing global landscape.
A major highlight of the budget is a 20% reduction in university student loan debt, providing financial relief to graduates. Additionally, over US$1 billion has been allocated to public hospitals, and tax cuts have been introduced to support lower-income earners. The government also announced a two-year freeze on excise taxes for draught beer, a decision expected to be popular in a country known for its high beer consumption.
Another significant investment is US$1.9 billion earmarked to boost Australia’s “green” metals industry. Traditionally reliant on coal-fired power, steel and aluminium production is set to transition towards renewable electricity, aligning with the country’s goal of reducing carbon emissions. Chalmers stated that this move would position Australia as a key player in the global shift toward net-zero emissions.
Amid concerns over international security, Australia has also brought forward approximately US$600 million in defence spending. Chalmers indicated that defence funding is projected to surpass 2.3% of GDP by the early 2030s. This increase comes as Washington urges its allies, including Canberra, to allocate more resources to military training, weapons, and hardware. Australia is already undergoing an extensive military modernization program, acquiring long-range strike capabilities in response to China’s expanding naval presence in the region.
Prime Minister Anthony Albanese is widely expected to call a general election later this week, with voting required to take place by May 17 at the latest. Recent polls suggest a tight race between the Labor government and its opposition, the conservative Liberal Party.
AFP