Yes, good morning to you all.
Can I just tell you last night, what you saw in the federal budget, was actually a significant change in direction for the way in which the Australian economy is going to be run into the future. No more are they saying “the way to get the budget back into balance, is to actually cut expenditure wherever you can” the government will try and find it if they can. But what you’ve seen from Scott Morrison and Malcolm Turnbull is a different strategy. One which says, we’re going to try and grow the economy faster. So what happens is the national income and eventually taxes, grows faster than what our expenses do, now that’s a pun because if you don’t get that growth quite clearly, the debts will start them out.
So to do this, what they’re doing is to go into more debt, but what you can see is eventually they come into surplus. Now this is important, you can see it here, at the 2020/21 the government goes back into surplus, 7 billion dollars. That was important for the triple-a credit rating to be maintained. If that had been lost, their economic credibility would have gone as well. The second part of this also comes down to the nation’s debt, it’s going to rise, the gross debt is going to go to 660 billion dollars, with many of these new programs, but eventually with the economic growth, they hope that the debts will start to come down and with it that interest bill as well. But what they’re hoping is that more people will be working, less people on welfare and also that commodities will come back as well. So say for example the iron ore price in here is forecast to go down from 66 dollars on average now down to 55 dollars, the coal price 317 dollars a ton now, will go back to 120 dollars a ton.
But the fact is what they want is Australians to work, that’s really what they want, because still half of the taxes that the government collect, come from you, workers at home and that’s where there’s no let-up in the burden on taxpayers at least not now.
Dow Jones Indexes overnight down by 36 points, Aussie dollar low 73 point for US cents. That’s the budget Karl and Lisa
Source: Today Money Minute/Ross Greenwood