Jim Chalmers promises budget spending as economy slows [Video]

Treasurer Jim Chalmers has admitted the economy has slowed more than he expected, while declaring next week’s budget would not adopt a “scorched-earth austerity” approach to bring down inflation.

As the Reserve Bank board prepares to announce whether it will hit home buyers with another interest rate rise on Tuesday, Chalmers pushed back at accusations he was making life more difficult for the bank by running budget deficits over coming years.

Despite a $25 billion increase in expected tax revenues over the next four years, Chalmers is expected to announce cumulative budget deficits larger than the $73.4 billion forecast in the mid-year update in December.

The larger deficits will not materially affect the government’s debt level, which is on track to reach $904 …