Growth, inflation and labour market all easing
NAB’s Chief Economist, Alan Oster provides a pre-budget overview of the Australian economy focussing on what we’ve already seen from the Government and commentary on the deficit. Join us on Wednesday 15 May for a full budget breakdown.
“As we go into the budget, I think, what we know is that the economy is a bit softer about 2.25%, unemployment is edging up and will continue as the reserve bank’s interest rate cuts continue to raise concern.
From a budget point of view, this sort of environment just means that you are going to get less revenue and we’ve seen the government already announce that everyone is going to have to pay a higher marginal tax rate to fund some of the longer term benefits.
There’s been cuts in welfare, cuts in proposed lowering of thresholds, in other words income tax reductions have all gone. The aim will probably be to get a deficit turning into a surplus in the medium term. In the short term, somewhere about a $15 billion deficit this year, a small deficit next year and hopefully some surplus after that.
So please join us on Wednesday morning, when we’ll actually be able to tell you what exactly was in the budget and what it means for you.”
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