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Budget will ‘barely scratch surface’ to relieve cost-of-living crisis

This budget will be about ‘restraint’ and paying off debt.

A composite image of the 2023 Budget papers and Treasurer Jim Chalmers.
Treasurer Jim Chalmers will present the 2023 budget tonight. (Source: AAP)

When federal Treasurer Jim Chalmers delivers the budget for 2023 tonight, the central theme will be the cost-of-living crisis gripping Aussie households.

However, Chalmers has warned this budget will not be a cash splash, instead focusing on restraint so as to not add to already-soaring inflation.

The proposed $14.6 billion cost-of-living package would “barely scratch the surface”, according to new research from Finder.

What is causing Aussies the most financial stress?

Rising interest rates, rapid inflation and job insecurity were compounding the challenge for households.

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A whopping 43 per cent of Australians said their groceries were one of their top three most stressful expenses in April. The same number listed their rent or mortgage as a top bill stressor, the Finder data revealed.

Rising energy bills are also causing strain, with a quarter of Aussies admitting to having received an unexpectedly high energy bill over the past 12 months.

All these stresses have left one in three Aussies feeling “extremely stressed” about their financial situation.

Aussies should 'follow budget's example'

Finder money expert Rebecca Pike said Australians' finances were hit particularly hard in the first half of 2023 and the situation was deteriorating fairly rapidly.

“Rising interest rates and rapid inflation is making it harder to pay the bills,” Pike said.

“Squeezed significantly in many areas – from higher food prices to childcare fees – and with winter upon us, chances are energy bills are going to go up as people heat their homes and stay indoors,” she said.

Pike said the government’s hint at a return to surplus was a good example for households to follow.

“It’s time to show extreme restraint in spending and start aggressively paying off debt. Even if you are secure in your job, the golden rule is to have three to six months worth of income saved up,” Pike said.

“For some, there’s nowhere left to cut back, but we are coming up to tax season and if there’s any return coming, households would be wise to not rush out and spend it.”

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