The federal government will be forced to to downgrade expectations of economic growth in Tuesday's federal budget, amid global uncertainty, high inflation and interest rates.
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Real gross domestic product is expected to grow by 2 per cent in 2024-25, and 2.25 per cent in 2025-26, but this will be a quarter of a percentage point lower than previously forecast in the Mid-Year Economic and Fiscal Outlook (MYEFO).
Tuesday's budget will link this to considerable uncertainty around the outlook for the domestic and global economy.
Treasurer Jim Chalmers was confident his third budget would put downward pressure on inflation, which has moderated faster than expected. The latest annual outcome shows inflation has come down to 3.6 per cent, through the year to the March quarter.
Treasury had expected it to be 3.75 per cent to the June quarter of 2024.
"Inflation is moderating in welcome ways but it's not mission accomplished because people are still under pressure," Dr Chalmers said.
"[It] is still the big near-term challenge in our economy, which is why the government is doing its bit in the budget."
The Treasurer also sought to frame mums and middle Australia as winners in tomorrow's budget, as he unveiled the initial billion-dollar cost to pay superannuation on paid parental leave.
The $1.1 billion investment over the four years from 2024-25 was unveiled as families around the country celebrated Mother's Day on Sunday. Beyond that, it is expected to cost $623.1 million per year ongoing.
The money would mean parents who are receiving Commonwealth-funded paid parental leave will get a super payment of 12 per cent of their entitlement from mid-2025.
"Our budget will be part of the solution to cost of living pressures, not part of the problem," Dr Chalmers said.
Budget to 'shift the dial' on gender equality
Speaking in Canberra on Sunday, Finance Minister Katy Gallagher said the funding showed gender equality had been "a signature priority" for the Albanese government.
"The cost of not doing it would be ... that women who are taking time out to care for children would lose that super on their earnings," said Senator Gallagher, the Minister for Women.
"And we know that in the long term that's going to hit them and hit their superannuation savings."
Labor says reforms to tax and student debt, and wage boosts for the childcare and aged care sectors, will benefit Australian women more broadly.
"Since we came to government we've been trying to shift the dial, particularly on gender equality, completing unfinished work like whether it be super on [paid parental leave, or] wages in the aged care and childcare sector which are largely feminised industries," Senator Gallagher said.
"It's a significant investment, and it's not going to change things overnight.
"But it hopefully will make women and women's economic independence a bit more of a reality for all women across the country."
More than half of the $3 billion to be wiped from student debt is expected to go to women.
The relief will come from a decision to cap the indexation rate on HELP debts to the lower of either the consumer price index (CPI) or the wage price index (WPI).
The decision was backdated to take effect from June 1, 2023, slashing the indexation rate from 7.1 per cent to 3.2 per cent, and returning about $1.75 billion to Australian women.
The government has also pointed to a multi-billion dollar investment towards wage increases for early childhood educators and aged care workers, to be detailed following the budget.
Treasury analysis shows the care economy has experienced the strongest employment growth of any sector since May 2022, with many new jobs filled by women.
Health care and social assistance jobs have grown by more than 200,000 places, with women filling around nine out of the 10 newly created positions.