The no-fuss Budget in under 10 minutes

Albo and is merry band of government people has unveiled they/there/thems first budget. Well done.

Here’s what you need to do. Nothing, its all been done for you but just in case you needed to add to the conversation flow at this weekends family BBQ I have slimmed it down.

• We don’t expect this to have any long term impact on investment outcomes with respect to property investment (now is still a great time to invest).
• There will be less net spending by the government as well as increased revenue from relatively high commodity prices and some increased tax revenue.
• Public debt still remains low compared to other countries
• Expected boost in housing supply from 2024 onwards
• Expect continued rent increases as the undersupply grows
• Lower budget deficits until 2023 doesn’t add to inflation
• Less stimulus so that doesn’t put upward pressure on interest rates
• Probably one more rate hike next week and then we’ve peaked
• Deficit this year expected to be $37b (compared to $78b in March)
• Government expects lower budget deficits in 2022 and 2023
• Government expects CPI to peak at 7.75% this year
• GDP growth for 2023-24 revised down to 1.5% due to weaker consumer spending
• Unemployment rate expected to rise from 3.5% to 4.5% by 2024
• Net immigration expected to rise to 235,000 (back to pre-pandemic levels)
• Terms of trade supported by higher iron ore prices (which will also help reduce the budget deficit)
• No new fiscal stimulus for next year (also reduce budget deficit)

Handy hint definitions to get you through grown up talks: 

A fiscal deficit is a shortfall in a government's income compared with its spending.

A fiscal stimulus an attempt by a government to increase economic activity by doing things like reducing taxes, increasing government spending, or sometimes they do both.

 

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