OPINION: Labor must commit to budget repair – starting with a plan to rein in the NDIS – to prevent fiscal policy from fuelling inflation and higher interest rates.
that it would do whatever it takes to normalise monetary policy to fight inflation, the focus has turned to re-anchoring the budget expectations set loose by the pandemic and an election campaign in which neither side would commit to fair dinkum fiscal repair.
Mr Kennedy says that with Australia needing to rebuild its fiscal buffers, the more “prudent course” would be explicit budget repair that could occur either through structural savings or scaling back corporate tax exemptions. Mr Kennedy also said that with inflation now expected to rise well above the 4.25 per cent annual peak contained in the pre-election budget outlook, real wages will be lower than previously expected.It’s not the new government’s fault that a global supply chain shock followed by a global energy shock has landed in its lap. The challenge now is to face economic reality, and retrofit its “cost of living crisis” election rhetoric and promise to reverse a decade of wage stagnation.
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