Federal budgets have always been a juggling act, but inflation's belated second wind and a weakening economy means the treasurer must somehow encourage growth without making inflation any worse.
Federal budgets have always been a juggling act, an attempt at trying to balance competing interests.Until just two months ago, it was to be a relatively simple affair as all the stars seemed to be aligned for the government.
Not any longer. In a spectacular twist of bad luck, inflation seems to be getting a belated second wind even as the economy is weakening. Federal budgets are a little like opening night. A lot of hype in the build-up, a good deal of grandstanding on the night, applause from the audience, and critics pointing out the shortcomings the minute they're off stage.It's still anyone's guess as to how far households and businesses will need to be screwed down by the RBA's interest rate hammer to get the rising cost of living under control.There used to be the odd leak to a favoured media hack here and there.
It all lies in the assumptions. The Treasurer argues that further cost-of-living measures – such as bill relief for power, rent and childcare – will deduct points from the Consumer Price Index and hence inflation. But no-one really has the faintest idea. That's why the monkey with the dart board always wins the stock-tipping contest.As part of the theatre, the opposition can be expected to launch into a scathing criticism of the way the nation's finances are being handled.
The only time it's broken out of that range was during the pandemic when the Morrison government splashed huge amounts of cash on its poorly designed JobKeeper program with spending soaring to 31.4 per cent.The biggest factor affecting our national finances into the future will be the stage 3 tax cuts which take effect on June 30. They're expected to pump about $20 billion into the economy in the first year alone, courtesy of a lower tax take.
Chalmers Rba Inflation Interest Rates Michele Bullock Jim Chalmers Federal Budget Surplus Tax Cuts Stage 3 Tax Cuts Stage 3
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