Australia to ‘Try to Thread the Needle’ in Budget Tested by War

Australian Treasurer Jim Chalmers aims to deliver a budget that tackles inflation, revives productivity and reins in deficits, a tough challenge at a time when fuel prices are soaring because of the war in the Middle East.

His ability to spend is constrained, with economists predicting Chalmers will announce on Tuesday evening an underlying cash deficit of A$25 billion ($18 billion) for the 12 months through June 2027. That’s better than an official mid-year forecast of A$34 billion, but still deep in the red given a tight labor market and elevated export prices.