“The Greens won’t support these reforms until either the RBA cuts interest rates or Dr
Chalmers forces [it] to.”

Chalmers has made clear he had wanted Coalition support for the reforms, but the Greens offer of support without any changes to existing legislation paves the way for the changes to be put in place ahead of next year’s expected federal election.

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Financial markets believe there’s just a 10 per cent chance of a rate cut on Tuesday following this week’s meeting. But the same markets believe there is an 84 per cent chance the bank will use its December meeting to cut the cash rate to 4.1 per cent.

Those expectations could change, as monthly inflation data to be released on Wednesday is expected to show a fall in overall prices. Economists are tipping an annual inflation rate of around 2.7 per cent, the lowest level in almost three years.

Some of the drop in inflation will be due to government energy subsidies. Prices for a range of goods including petrol and clothes have also started to fall. The stronger Australian dollar also reduces the price of imported products.

Soon after this week’s inflation data, the government will release the final details of the 2023-24 budget, which Chalmers said would show a surplus about $15 billion. In May, Chalmers had forecast a surplus of $9.3 billion.

When the 2023-24 budget outcome was first forecast in 2020-21, then treasurer Josh Frydenberg tipped a deficit of $66.9 billion and that gross government debt would be at a record high of more than $1.1 trillion.

Chalmers will reveal gross debt at $906.9 billion, with a $4 billion saving in interest costs in 2023-24 and $80 billion over the coming decade.

It follows a surplus of $22.1 billion in the 2022-23 budget year, which is the largest nominal surplus on record.

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Chalmers said total tax revenue was lower than had been forecast in May, but there had been an improvement to the budget because of a “big improvement” in spending.

Some of the savings are expected to have come out of the National Disability Insurance Scheme.

“What that final budget outcome will show is that we have turned two big Liberal deficits into two big Labor surpluses,” he told Sky News.

Last week, the US Federal Reserve cut its key lending rate by half a percentage point to a range between 4.75 per cent and 5 per cent. Chalmers said he believed Australia’s inflation rate was a little higher than comparable nations as their inflation levels, and interest rates, had peaked earlier than here.

He said the trajectory of Australian inflation was “a couple of months” behind other nations.

“Here in Australia, inflation has come off really substantially. Interest rates aren’t as high as they are in some of those other countries, but the shape broadly of this inflation challenge has been pretty similar around the world,” he said.

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