The Albanese Government plans to fund its latest election commitments by increasing visa fees for international students and reducing reliance on consultants, in a bid to maintain budget discipline amid mounting warnings about Australia’s financial outlook.
Treasurer Jim Chalmers has pledged that more than $7 billion in identified savings will be used to cover the cost of Labor’s new election promises, following concerns raised by ratings agency S&P Global that Australia risks losing its prized AAA credit rating due to ballooning public spending.
Under the plan, visa application fees for international students will be increased by 25%, a move the government argues will help manage migration levels while generating additional revenue. Labor will also scale back spending on external consultants and contractors, as part of a broader effort to tighten federal expenditure without cutting essential services.
“Our election commitments are responsible, affordable, and fully funded,” Dr Chalmers said.
“We will deliver a stronger budget by finding sensible savings and making sure that every dollar spent is directed toward strengthening our economy and supporting Australians.”
The move comes as the government faces pressure to show fiscal restraint while rolling out popular measures aimed at cost-of-living relief, healthcare improvements, and renewable energy investments.
S&P Global earlier this week flagged concerns that generous spending by federal and state governments could jeopardise Australia’s AAA rating, which helps keep borrowing costs low and supports economic stability. The agency pointed specifically to election-driven spending as a growing risk.
While Labor’s promises are designed to appeal to voters ahead of the May 3 election, including expanded energy bill support and more investment in education and training, the government is eager to reassure financial markets that its pledges will not blow out the national budget.
The increased burden on international students has already drawn criticism from education sector leaders, who warn it could harm Australia’s global competitiveness in attracting overseas talent. Universities Australia has cautioned that any significant increase in visa fees must be balanced carefully to avoid discouraging prospective students who contribute billions to the national economy each year.
Meanwhile, efforts to curb consultant spending have been welcomed by public sector unions, who have long criticised what they describe as an overreliance on private firms for work that could be done in-house.
The opposition has seized on the developments, accusing Labor of using students and staff cuts to plug holes in its financial planning while continuing to add to the cost of living pressures faced by Australians.
Shadow Treasurer Angus Taylor said Labor’s approach showed it had “no plan for sustainable economic management,” warning that targeting students and consultants would not be enough to offset a wave of new spending commitments.
As the final days of campaigning unfold, budget management has become a central issue, with both major parties attempting to position themselves as better stewards of the nation’s finances.
Labor is banking on its assurances of fully-funded commitments and responsible savings to reassure voters, as it seeks to retain government amid growing scrutiny from both financial markets and political opponents.
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