ANALYSIS: Frydenberg's long-promised Christmas gift that no-one wants
But after a decade of disappointments, missteps and broken promises,much skinnier surplus than the one promised at election timeStill, that puts the Treasurer at odds with vast swathes of the economics fraternity, the business community and, more importantly, the Reserve Bank of Australia.
The Reserve Bank argues that unemployment needs to drop to about 4 per cent before labour shortfalls feed through to higher wages. In the Mid-Year Economic and Fiscal Outlook, however, Treasury maintained the decades-long belief that the unemployment sweet spot is 5 per cent — meaning we're only a whisker away from a wages growth break-out.And that puts the onus back on the RBA to kickstart domestic growth.after three cuts this year.
GDP growth has been cut dramatically, to 2.25 per cent. The most recent reading, however, was an annual rate of 1.7 per cent for the September quarter.
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