9News: Budget reveals big taxes on banks

Treasurer Hands Down Federal Budget

Peter Overton: Laurie Oakes and Chris Bowen

Well, let’s go back to Nine’s Ross Greenwood on the frosty front lawn of Parliament House.

Ross, to get the budget back into surplus, so the treasurer’s economic numbers, is his forecast believable?

Ross Greenwood: Well that’s the big question here because I’ve spoken to Moody’s  the big ratings agency today – and quite clear about this budget the government  could not afford to lose a AAA rating.

They say it will be back in surplus in  2000 and 2021,  and that’s on schedule with where the ratings agencies expected to be.

It’s helped again tonight by the Australian dollar falling to around 73.5 US cents, which is off the back of lower commodity prices but do bear in mind that the government’s got an interesting observation here.

These are treasury forecasts, but what they say  is  that the economy will grow steadily at around 3% in the coming years.

But what they also show is that wages growth will take off.

Now, normally wages don’t rise unless you actually start to get the economy really picking up a head of steam.

It isn’t happening that way, and so interesting part about this is much of the taxes the government will collect to help them get themselves back into the black in this way is coming from the pockets of ordinary workers through their taxes.

And if those taxes do not increase in the way that the government expects, then the forecasts are in a whole lot of trouble.

Because they say, for now, the ratings agencies believe  what the government’s telling them.

And from their point of view that means the AAA rating is intact – for now.

Peter: Okay just a final overview, a final comment – businesses and markets – how do you think they’ll receive what Treasurer Scott Morrison delivered tonight?

Ross: Big business is not happy and the reason for that is the bank tax.

But then, the banks that seem to be a fairly soft target.

Small businesses will be happy because there’s one measure that’s going to continue and that is that $20,000.00 instant asset write-off for small businesses, is going to continue for another year.

I’d suggest probably maybe some home buyers might just have a

little question.

All of this has done, to moderate house prices but also, there could be interest rate rises coming down the track as well.

Overall, the budget is probably more achievable than previous budgets.

The question is whether long-term it’s actually going to fulfill many of the ambitions of Australia –   that remains to be seen

Peter: Okay Roscoe, as always…thank you.

I think you’ll be on The Today Show in a handful of hours so try and get a bit of sleep.  Thanks for everything, as always my friend. Good on you Ross

[Music]

Mathias Cormann – Budget 2017

 

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