We fact checked some key claims from Jim Chalmers's budget speech. Here's what we found

Jim Chalmers delivered his third budget speech on Tuesday night, but did he stick to the facts? (AAP: Lukas Coch)

The tension created by the need to address cost-of-living pressures while not adding to them was front and centre in the Albanese government's third budget, handed down on Tuesday night.

And with an eye to the next election, Treasurer Jim Chalmers was eager to spruik the government's economic credentials, as he saw them, in his budget speech.

But in doing so, did he stick to the facts?

To help you decide, Fact Check has rounded up some of the key claims Mr Chalmers made, served up with the context you need to understand them.

Windfalls saved this year, but what about later?

With keeping a lid on inflation a central theme of the budget, the treasurer highlighted Labor's efforts to avoid pumping its budgetary gains back into the economy.

"[We] are banking 96 per cent of revenue upgrades this year — keeping pressure off inflation while it is still above band," Mr Chalmers said.

Fact Check has looked at the government's track record of banking its budget revenue upgrades before.

Treasurer Jim Chalmers says that over two budgets and a MYEFO the government has banked 88 per cent of revenue upgrades, compared to the Coalition's 40 per cent. RMIT ABC Fact Check runs the numbers.

Up until December's mid-year budget update (MYEFO), over its term the government had returned 88.4 per cent of unexpected tax revenue increases to the budget.

When considering increases in other types of revenue (all parameter variations), as well as any unexpected falls in expenditure, Fact Check found Labor had banked 85.4 per cent of its gains.

As for Tuesday's budget, the government forecast that 96.3 per cent of increased tax revenue since MYEFO would be returned to the budget in the 2023-24 financial year, or 98.5 per cent of upgrades from all parameter variations.

But that's where the savings end.

Over the next four years, the government plans to return very little of its revenue windfalls to the budget. It means that between 2023-24 and 2026-27, the government will only bank 4.6 per cent of $24.3 billion in tax revenue upgrades.

Looking at all parameter variations, the government plans to spend around twice as much on policy decisions as its $12.6 billion windfall between 2023-24 and 2027-28.

Indeed, as Mr Chalmers alluded to, the government will begin to spend more of its budget upgrades from 2024-25. At the same time, inflation is forecast to fall to 2.75 per cent, which is within the Reserve Bank's target band of 2 to 3 per cent.

'Record' jobs growth?

The treasurer pointed to the jobs market as a success story for the government amid worsening global economic conditions.

Prime Minister Anthony Albanese says the number of jobs created since Labor was elected is a record for a first-term government. Is that correct? RMIT ABC Fact Check takes a look.

Echoing comments made by Prime Minister Anthony Albanese, Mr Chalmers claimed that "around 780,000 jobs have been created under this government, a record for any first term".

But as Fact Check recently found, while the government's numbers might stack up, there's more to the story when comparing jobs growth.

According to employment data for February of this year, the latest available when Mr Albanese made his claim, there were an additional 789,700 employed people in Australia compared to when Labor came to power 21 months earlier.

This was indeed the largest increase for a first-term government since 1966 — at least, on the raw numbers.

With population growth taken into account, however, the data revealed a greater increase under Bob Hawke's first-term Labor government: the employment-to-population ratio grew by 0.9 percentage points compared to the Albanese government's 0.5 percentage points.

And on various other employment measures recommended by experts — such as the number of hours worked and the rate of underemployment — the Hawke government once again beat out the Albanese government.

Nonetheless, the latter did fare better than the other five first-term governments considered.

The rise in total employment over the Albanese government's first 21 months was driven primarily by full-time workers, who made up 56 per cent of the increase in people employed. (This compares with 83.3 per cent under the first-term Hawke government.)

Importantly, experts stressed that governments could not take sole credit for "creating" jobs, as Mr Albanese claimed.

Professor Mark Wooden, an emeritus professor at the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne, told Fact Check: "No government (or PM) can take sole credit (or blame) for changes in aggregate employment levels."

Real wages are growing, but not by much

Mr Chalmers claimed "real wages are growing again for the first time in almost three years".

Indeed, ABS data confirms that there has been little good news for real wages in the years since their peak under the Morrison government.

Between June 2020 and June 2023 they fell by more than seven per cent, and they have recorded only marginal increases in the year since.

But while Mr Chalmers highlighted budget forecasts of a rise in real wages, the projections suggest those increases will equate to growth of just 0.5 per cent in each of the next two financial years and 1.0 per cent in each of the two years to 2027-28.

This means the purchasing power of the average wage will remain lower than it was before the pandemic for some time yet, which spells trouble for Labor's election promise to get real wages growing again.

At the 2022 election, Labor promised to get real wages growing again. Here's how that promise is tracking.

On the current trajectory, voters will likely have to wait until the 2026-27 financial year — well beyond the next election — for real wages to reach the level they were at when Labor came to power.

As noted recently by Greg Jericho, the Australia Institute's chief economist, "with wages finally rising faster than prices we are seeing real wages rise".

"But the fall was so steep that the recovery will be long."

Participation rate close to the record

The treasurer said Australia's economy was well-placed to deal with global and domestic challenges, and pointed to "near-record participation" rates as just one element of Australia's "envied" economic results.

As the Reserve Bank explains, the labour force participation rate is an estimate of the nation's active workforce, calculated as the share of people over the age of 15 who are employed or actively seeking employment. According to the latest seasonally adjusted data published by the ABS, Australia's participation rate hit 67.0 per cent in November 2023, the highest level since monthly records began in February 1978.

The latest data shows it had fallen to 66.6 per cent in March 2024, which was only slightly down from 66.7 per cent in February.

So, Mr Chalmers was correct to say that the rate is a near-record.

The data also shows that labour force participation hit a record low of 60.1 per cent in April 1983.

Principal researchers: Matt Martino, Ellen McCutchan, Ashleigh Webb and Maria Petrakis

Fearlessly follow the facts no matter where they lead.

This article was undertaken through a collaborative partnership between RMIT University and the ABC, which concluded in June 2024. The article should be attributed as "RMIT ABC Fact Check [date]"

Fact Check made in partnership with RMIT University

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