Re-election pledges set to tip Australia's budget back into the red

Australia is set to deliver a budget deficit this week, snapping two rare years in the black, as Prime Minister Anthony Albanese doles out household relief to boost his re-election chances and global risks cloud the economic outlook.

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SYDNEY -

Ahead of his fourth budget on March 25, Treasurer Jim Chalmers has said the budget will be "responsible", with targeted cost-of-living measures front and centre.

"It's a budget which is all about the cost of living, but also making sure our economy is more resilient in the face of all this global economic uncertainty," Mr Chalmers said in a TV interview on March 23.

The government on March 23 announced extended electricity rebates for households until the end of 2025, costing the budget bottom line A$1.8 billion (S$1.5 billion). It will also help more first-time home buyers enter the property market through a shared equity scheme.

Canberra will bring forward A$1 billion in defence spending to accelerate its military capability at a time when other US allies are also boosting their spending on defence.