Challenges put pressure on third Albanese budget

The Albanese government will hand down its third federal budget on Tuesday and faces a number of economic and social challenges for its spending plans.

KEY SHORT- AND LONG-TERM CHALLENGES

*Inflation that's moderating but still too high

*Elevated interest rates and a risk they stay higher for longer

*A strong but softening jobs market

*Weak economic growth

*Lacklustre household spending

*Sluggish productivity growth

*An array of global economic challenges, including volatility in oil markets and a troubled Chinese economy

*Strong population growth, which adds to labour supply but is also extra demand for housing in a tight market

*Pressure to do more to prevent domestic violence

*Pressure to help low-income Australians with the cost of living, including lifting Jobseeker payments

*Climate change and the net zero transition

*An ageing population

*Rising geopolitical instability