Treasurer Jim Chalmers is warning the coalition's nuclear plan will result in a $4 trillion hit to Australia's economy, as he defends Labor's track record on tackling energy bills.
The mid-year budget update, to be released on Wednesday, is expected to show a deterioration in the budget bottom-line.
Dr Chalmers said the opposition's proposals were a recipe for shrinking the economy to $294 billion by 2050.
"In terms of the lost output between now and then ... it's about $4 trillion, so you can see that Peter Dutton and the coalition are the biggest risk to our economy and to household budgets," he told Sky News on Sunday.
Describing the plan as "real slapstick stuff" Dr Chalmers defended Labor's previous modelling that power bills will go down by $275 by 2025.
Asked if the coalition's plan would shrink the economy, Shadow Treasurer Angus Taylor said Labor was already doing that.
"It's completely unprecedented," he told Sky News.
"We've never seen the hit to household disposable incomes, the standard of living of Australian households like we've seen since Labor came to power, not at any time in the past".
Payments to veterans are set to place further pressure on the budget as the federal government clears the backlog of claims.
Dr Chalmers said an extra $1.8 billion in payments would impact the mid-year budget update as the government worked to "pay veterans what they're owed" and clear a backlog.
"We're doing the right thing by our veterans and that will have an impact on the budget," he said.
"Pressures on the budget are intensifying, estimates variations like payments to veterans are a big part of the story and you'll see that in the mid-year update."
The $1.8 billion comes on top of the $6.5 billion in additional veterans’ payments in the 2024/25 budget.
The government has accused the coalition of failing to adequately fund the Department of Veterans’ Affairs teams responsible for processing veteran claims during its time in office, resulting in a logjam of some 42,000 unallocated claims.
The claims were cleared at the end of February 2024 ahead of a March 2024 deadline set by the Royal Commission into Defence and Veteran Suicide.
But action to clear the backlog has put more pressure on the budget as the department continues to pay more veterans their entitlements.
The government is spending $254.1 million across four years to upgrade and sustain IT systems to ensure timely payments and better access to services for veterans and families.
Dr Chalmers also said he could unveil his appointments to the Reserve Bank’s new interest rate setting board on Monday.
The central bank’s board will be split into two committees for interest rate setting and governance after legislation passed the parliament in this year’s final fortnight of sittings.
After a series of unexpectedly strong budget returns, the economic outlook is dimming.
Analysts predict the budget's bottom line will worsen by $4.7 billion across the next four years due to slowing tax revenues and increased spending on things such as subsidised child care and energy rebates.
The Albanese government released its response to the royal commission's final report earlier in December, outlining a long-term plan for what it said was a comprehensive reform to support defence personnel, veterans and their families.
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