Before going into more detail about tax changes, Chalmers spends some time outlining Treasury’s forecasts for fuel and inflation.
The price of oil, he says, is forecast to stay around $100 a barrel until the end of next month, falling to $80 by the end of June next year.
“On that assumption, [oil] would still be above its pre-conflict price in 12 months’ time.”
Because of this, Treasury is forecasting inflation to peak around 5 per cent in the middle of next year.
Treasury has also modelled a more severe scenario in which the oil price peaks at $200 and takes three years to fall back down. Australia would avoid a recession in this case, according to Chalmers, but unemployment would spike to pre-pandemic levels and inflation would peak above 7 per cent.
The Albanese government previously announced it would spend billions boosting Australia’s fuel and fertiliser reserves.