Delayed road and rail projects have provided billions in budget savings. 

Treasurer Jim Chalmers' recent budget cuts totaling $9.8 billion are primarily a result of postponing significant road and rail projects beyond the four-year forecast, according to the mid-year budget update.

The mid-year economic and fiscal outlook (MYEFO) says 75 per cent of these savings originate from previously announced adjustments to the 10-year, $120 billion Commonwealth infrastructure investment plan.

These changes are part of a comprehensive reform of federal spending on transportation infrastructure, aiming to address cost overruns that had rendered the existing pipeline unsustainable.

Infrastructure Minister Catherine King has committed to maintaining the $120 billion budget over a decade, necessitating cuts or delays for cost overruns and new projects. Disputes with states and territories over cost overrun responsibility persist.

Dr Chalmers revealed that road and rail spending would decrease by $7.4 billion over four years, mainly due to $8.8 billion being pushed beyond 2026-27. Some projects were cancelled, while new spending was introduced.

MYEFO documents indicated that these additional funds would support current infrastructure projects, enhance productivity, and prevent capacity constraints that could trigger inflation.

The $6.8 billion in extra funding was allocated to 47 priority projects, including the North South Corridor in South Australia, Queensland projects, Western Australia projects, the Canberra Light Rail - Stage 2A, and Victorian projects like the Western Highway.

A surge in tax revenue, coupled with a $7.4 billion infrastructure spending delay, bolstered the budget by $39.6 billion over the four-year period, positioning it for a second consecutive surplus this fiscal year.

MYEFO, presented by Treasurer Jim Chalmers, adjusted this year's budget outlook from a forecasted $13.9 billion deficit to a slight deficit of $1.1 billion.

While Dr Chalmers did not explicitly predict a surplus, the substantial revenue influx suggests the potential for one, affording the government room for cost-of-living relief and other measures in the upcoming budget.

Overall, the budget projects a cumulative deficit of $74.5 billion from 2023-24 to 2026-27, down from the $114.1 billion forecasted previously. 

Higher tax receipts, particularly from personal income and company taxes, contributed to this improvement.

Despite the improved debt position, rising long-term bond yields will make the debt interest bill the fastest-growing expense, surpassing the National Disability Insurance Scheme. 

This interest bill is expected to increase by an average of 11.7 per cent annually over the next decade.

ACOSS has called on the Federal Government to address the cost of living crisis by supporting low-income individuals. 

Following the mid-year budget announcement, the Australian Council of Social Service (ACOSS) advocates for income support increases, permanent reductions in energy bills, and the elimination of Stage 3 tax cuts to combat inflation.

ACOSS Acting CEO Edwina MacDonald has expressed concerns about the financial distress faced by those on the lowest incomes due to surging rent and energy costs. 

ACOSS demands an increase in income support payments to at least $78 per day and believes that scrapping Stage 3 tax cuts, which primarily benefit higher-income individuals, could fund these essential services.