Jim Chalmers delivers federal budget, targets inflation and promises budget repair

"Restraint is the name of the game in this budget," Dr Chalmers told reporters in Canberra.

"Restraint is what defines this budget and what differentiates it from March and from recent budgets under our predecessors."

Much of the October budget centrepiece combines the five family-focused commitments of higher childcare subsidies, expanding paid parental leave to 26 weeks, making medicines cheaper under the Pharmaceutical Benefits Scheme, a new national housing accord designed to deliver thousands, possibly a million affordable homes and working on lifting real wages.

It comes as the budget reveals Canberra will become the home of a significant National Security Office Precinct, housing around 5000 staff with tenants such as the Office of National Intelligence and Department of Foreign Affairs.

READ MORE:

The investment comes against a backdrop of high inflation and higher interest rates, a global economy teetering on the edge with a "war that isn't ending", an escalating energy crisis, a pandemic without an end and now devastating floods.

The NDIS, aged care, health, defence and interest payments on debt are the five key pressure points in the budget.

As leading economists urge severe cuts to spending, Dr Chalmers declared the October budget makes "hard decisions for hard times".

"This is important - to keep spending under control, to give ourselves a better buffer for any further downturns, and to make sure we are not adding to inflation," the Treasurer told parliament.

Off the back of $21 billion in savings as well as a $100 billion revenue bonus from booming commodities and income tax receipts, the budget shows the deficit has been more than halved since the $78 billion deficit forecast in the last Coalition budget in March.

The gross debt figure is lower than the March projections every year for the next four years, but it still rises beyond a trillion dollars in the 2023-24 financial year.

The Treasurer said 99 per cent of the new tax upgrades will be returned to the budget over the next two years, and 92 per cent will be returned over four years.

He flagged reforms in the not too distant future, saying the October budget is the first step in a long path to budget repair.

"We are prepared to take difficult decisions in difficult times," Dr Chalmers said.

"I don't think that work can wait for another three or four budgets. It has been neglected for two long and so we do hope to lead a conversation this term about how we get this budget to a more sustainable footing."

READ MORE:

The housing accord - to sit alongside the $10 billion Housing Australia Future Fund - is a partnership between governments, investors and industry to potentially build one million affordable homes across the nation through an initial $350 million.

More than $530 million will progressively be spent over four years to scale up the plans to expand the tax-payer funded paid parental scheme from 18 weeks to 26 weeks by 2026.

It is a feature of the ramped-up women's budget statement, but it is designed for the whole family.

$1.7 billion is being spent on women's safety initiatives, including tackling gender-based violence and implementing all of the Respect@Work measures and funding Working Women's Centres in all states and territories.

The Minister for Women Katy Gallagher plans, longer term, to apply a gender lens to the whole budget.

"The idea is that we would mainstream it into the budget papers," she said. "My hope at the end is that we do not need a women's budget statement, but we have it embedded through the way we present the budget."

The budget papers show unemployment is expected to rise to 4.5 per cent, while annual inflation will peak at the end of this year around 7.75 per cent, before starting to decline in mid-2023.