It is Budget season once again, and Western Australia's Treasurer Rita Saffioti is set to deliver the 2026-27 State Budget on Thursday, with Federal Treasurer Jim Chalmers following suit on May 12.
Modern Budgets are a far cry from the days when these documents were tightly guarded secrets that landed with a thud on Budget day. In an era where political spin is elevated to unprecedented levels, there are several tricks of the Budget trade.
Budgets can be unwieldy documents, so one method to ensure that none of the perceived good news is missed is to have a small army of staffers work on pumping out announcements leading up to Budget day. These pre-announcements can also serve as handy diversions if the news of the day is unfavourable.
The State Government has been hard at work on this front. Housing and health have been the focus of a flurry of announcements so far, along with some teasing of targeted cost-of-living relief, although the revival of previously popular power bill credits is considered unlikely.
Another tactic is to float ideas that ministers are keen to adopt but fear might provoke backlash. To test the waters, the notion that something is under consideration might mysteriously find its way into the media, which may then run it up the flagpole. If there is a major backlash, the idea might be quietly killed off. If not, the policy is likely to emerge in some form in the Budget papers.
Such is the case with the Federal Government and flagged changes to capital gains tax and negative gearing. Any suggestion of dumping or gutting these policies was seen as electoral poison not so long ago. But soaring house prices have made it increasingly difficult for first-home buyers to get a foothold on the property ladder. So the ideas have been dug up, reheated, and presented as a way to deliver intergenerational equity. The backlash has been less than Treasurer Jim Chalmers perhaps expected, so it seems like a done deal. Some form of crackdown in those areas can be expected on May 12.
One fly in the ointment for both State and Federal Treasurers is the growing chorus of economists who argue that government spending has been a key contributor to driving up inflation. They say this was a problem even before the oil price shock from the Iran war started to feed through to the data. Even Reserve Bank of Australia Governor Michele Bullock has linked government spending to the inflation dragon, and it is the bank's battle to tame inflation that has led to interest rate hikes to cool things down.
Those economists are likely to be hoping for words like "spending restraint" and "Budget repair" when the Budget documents land, and scanning those colour-coded graphs so beloved of treasury boffins to see how many are coloured red for debt.
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