The people who should be most worried about this profligate pre-election budget are Reserve Bank governor Michele Bullock and home borrowers.
Already a subscriber?The people who should be most worried about this profligate pre-election budget are Reserve Bank governor Michele Bullock and home loan borrowers.. He is front loading over the next two years more than 80 per cent of the net $24 billion of extra policy spending, the budget’s so-called “table of truth” reveals.household – even high-income earners – will receive a $300 energy bill rebate at a cost of $3.5 billion. Raising rent assistance by 10 per cent will inject an extra $1.
Treasury is worried the economy is weaker than the RBA thinks, so Labor is content to press a bit on the fiscal pedal, while the central bank keeps the foot firmly on the brake. Richardson estimates that for every $7 billion in additional government spending, the RBA needs to lift the cash rate 0.25 of a percentage point higher than otherwise.Finally, Chalmers has used an old budget trick to bury a further $80 billion of outlays not already mentioned.
But Labor has ramped it up, from $34 billion before the 2022 election to $51 billion last year, to a record $80 billion in this budget over five years.
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