Australian budget offers modest pre-election spending

Significance

The surpluses seen this year and last have proved an unexpected bonus for Labor and will enable a modest spending increase as the party prepares for the general election due by September 2025.

Impacts

• Government policies will become more interventionist, with an emphasis on the micromanagement of economic issues.
• Economic growth will be restrained by stubborn inflation and global supply chain uncertainties.
• National defence will consume an increasing share of the budget as regional tensions persist and partnerships develop.