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This year’s surplus will be bigger than the $4.2 billion projected at budget time: Chalmers

The surplus for the financial year that ends Friday will be larger than the $4.2 billion forecast in the budget, Treasurer Jim Chalmers will say on Wednesday.

In a speech to be delivered in Darwin, Chalmers says the government had been “deliberately cautious” in its estimate in the budget, “given the history”. This was a reference to former Treasurer Josh Frydenberg’s “back in black” prediction in 2019.

Now, “We’re in a significantly better position than we forecast,” Chalmers says. “We’re expecting the surplus will be bigger than forecast in May.”

The surplus upgrade has enabled the government to recently announce $2 billion for housing, distributed to the states and territories before the end of the financial year.

The good news on the surplus comes as Australian Bureau of Statistics figures on Wednesday will reveal how the fight against inflation is progressing. Next week the Reserve Bank will consider whether to raise interest rates yet again.

The cash rate is currently 4.1%, after the Reserve Bank has hiked rates a dozen times, most recently early this month.

Rating agency S&P Global said this week: “We expect the Reserve Bank of Australia to raise its policy rate further this year.”

Fadden byelection

Meanwhile, the government and opposition are gearing up for another byelection test, this time in the Liberal Gold Coast seat of Fadden, vacated by Stuart Robert, one of the ministers who oversaw Robodebt.

Opening Labor’s campaign on Tuesday night, Prime Minister Anthony Albanese homed in on Robert.

“Stuart Robert is resigning from parliament having presided over one of the most shocking and cruel failures in the history of Australian politics – Robodebt,” Albanese said.

“Ripping the humanity out of human services. Stripping the social justice from social security. Targeting vulnerable people – and bragging about it.

"That’s the sort of person Peter Dutton thought was good enough for his shadow ministry. And that’s the sort of candidate the LNP thought was good enough for your community. Those are the policies and values they put forward to represent you, time and time again.”

Fadden is on a margin of 10.6%. Although both sides expect the Coalition to hold it on July 15, a swing against the Liberal National Party would be another blow for Dutton, after the disastrous loss of the Liberal seat of Aston in Victoria.

The LNP is putting considerable resources into its Fadden campaign. There were mixed views in Labor about whether to contest the seat, but the local party was anxious to do so, because it overlaps areas important in the state election in 2024.

A swing against Labor would be interpreted, in part, as having implications for the Voice referendum.

Dutton said on Tuesday the byelection was “an opportunity to send the government a message in relation to cost of living, that you’re not happy with the policies that they’ve presided over – and also on the Voice.

"I think there will be a lot of people in Fadden who want to send the Prime Minister a very clear message that they’re not happy with his Canberra Voice proposal, and they’re not happy that he’s continuing to keep details from Australians in relation to how the Voice will operate.”

Labor’s candidate in Fadden, Letitia Del Fabbro, who ran at the 2022 election, is a nurse educator. The LNP candidate is Cameron Caldwell, a Gold Coast councillor.

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