CEO Morning Brief

Australia's Treasurer Aims to Chart 'responsible' Middle Path With Second Surplus in Reach

Publish date: Tue, 07 May 2024, 11:11 AM
TheEdge CEO Morning Brief

SYDNEY (May 6): Australian Treasurer Jim Chalmers said on Monday that the government would chart a responsible middle path in the budget that will be handed down next week, putting a second surplus within reach despite more spending measures.

The Treasury has said that it would bank 95% of additional revenue to avoid adding to the country's inflation challenge, but that the spending measures in the budget would be "unavoidable" and "all warranted" amid high costs of living.

"This is not the time for scorched-earth austerity. It would not be wise — when people are doing it tough and when the economy is soft — for us to slash and burn in this budget," Chalmers said at a news conference. "We're charting a responsible middle path. We're striking the right balance in the budget that we will hand down in eight days' time."

The Reserve Bank of Australia (RBA) faces a daunting task to get inflation back on target, and a surprisingly strong first quarter inflation report showed there was more work to do.

Markets are wagering that the RBA will keep interest rates steady at 4.35% on Tuesday, but there is a 40% probability that the central bank may have to raise rates to 4.6% by September.

The Labor government is expected to report a budget surplus on May 14, which will feature the government's revamped stage three tax cuts, aimed at giving every Australian some tax relief.

It will unveil more spending to fund the "Future made in Australia Act", a subsidy programme to help the giant commodity exporter bolster domestic manufacturing and promote industries.

Source: TheEdge - 7 May 2024

Be the first to like this. Showing 0 of 0 comments

Post a Comment