Chalmers said Australia has an inflation problem in economy for a range of reasons, including the impact of supply chain pressures, a slowing global economy, and the ongoing floods, reports Xinhua news agency.

“There are Australians in flood-affected communities who are doing it especially tough today,” he said in a press conference in Canberra on Tuesday morning.

“The Budget has three objectives: responsible cost-of-living relief; strengthening the economy; and beginning the hard yards of Budget repair.”

Chalmers said the commitments around cheaper childcare and medicines, investing in skills, investing in cleaner and cheaper, more reliable sources of energy, will be central components of the Budget on Tuesday night.

According to forecasts, Australia’s deficit for 2022-23 has been halved, an improvement from the A$78 billion ($49 billion) forecast in March to an expected deficit of A$36.9 billion, largely driven by tax revenues higher than projected as a result of high global commodity prices.

However, the forecasts warn the improvement could be short-lived, with growing spending pressures to drive worse-than-expected deficits beyond 2024.

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