Jim Chalmers has expanded on recent comments framing the upcoming May budget as his most ambitious yet, telling a Business Council dinner on Tuesday he was confident of landing "something meaningful" with the business community's help.
The government's influential expenditure review committee, which is responsible for deciding what's in and what's out of the federal budget and includes Finance Minister Katy Gallagher, met for hours on Tuesday and will meet again on Wednesday.
"We are absolutely full tilt now working through a broader than usual range of options," Dr Chalmers said.
Treasury has been drawing up a number of reforms that align with the treasurer's stated principles of improving intergenerational equity, encouraging investment and simplifying the tax system.
Reported options include cutting property-investor tax concessions, beefing up the levy on windfall gas profits,and axing an expensive tax break for electric vehicles.
Rather than a choice between resilience or reform, Dr Chalmers said the budget will be about both resilience and reform.
Australia was well prepared for the inflation and growth challenges the war in the Middle East would throw up, he said.
"But we will be buffeted."
Headline inflation was already running at 3.8 per cent over the year to January and is expected to climb even further from the Reserve Bank's two to three per cent target band, as soaring oil costs result in second order price increases across the economy.
ANZ Bank economist Adelaide Timbrell forecast inflation to peak at 4.9 per cent year-on-year in the second quarter of 2026, before falling to 2.6 per cent by the end of 2027.
"Thereafter, we forecast some disinflation from the impacts of lower real incomes growth and higher interest rates on demand," she said.
The Australian Bureau of Statistics will reveal February inflation data on Wednesday, which will give a final snapshot of the inflation picture before the outbreak of war.
Dr Chalmers flagged a substantial productivity package to make it easier to build, invest and get compliance costs down, building on the work the government has already done since the August 2025 economic reform roundtable.
But opposition housing spokesman Andrew Bragg said Labor had done nothing to cut red tape and make it easier to build new homes.
In a separate speech to the Business Council, Opposition Leader Angus Taylor will tout new analysis that shows the average Australian will be $35,000 worse off over the next decade in lost national income if current productivity projections are borne out.
"That would be more than a lost decade of productivity under Labor," he will say.
"There's a critical reason for Australia's economic slowdown: the Albanese Government has been shifting Australia away from a free-enterprise economy and towards a government-directed economy."
Much of the blame lies with regulator "quangos", which have become overbearing and seen their remits expand under Labor, Mr Taylor will say.
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