Labor defends $7.4bn increase in deficit to fund election promises

Jim Chalmers says investments in childcare and cleaner energy are necessary and further budget savings could be identified

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Labor says the party's decision to post $7.4bn in higher deficits than forecast over the next four years was not made lightly", but the spending is necessary to grow the economy.

As he released the costings on Thursday, the shadow treasurer, Jim Chalmers, said Labor had been through the budget carefully to identify savings to offset most of its proposed spending, which it has emphasised will help boost productivity.