Federal Budget Should Spend Big On Poorest Aussies, Economist Recommends
It’s time to splash some the of the lucky country’s wealth on our poorest citizens, according to one of the nation’s leading economists.
“History won’t judge our record kindly,” according to Chris Richardson from Deloitte Access Economics.
Australia’s budget is set to be back in the black, with the Government readying to deliver a spending plan that does not rely on the nation’s credit card for the first time in a decade.
But while politicians will no doubt take the credit for smart money management, Chris Richardson says it has more to do with luck.
“Continuing strength in jobs and profits, that combination is good in particular for the budget," he said.
“That combination means billions of extra dollars.”
The economics guru from Deloitte says it is time to consider a shake-up of welfare.
“This nation has one epic fairness fail, the continuing crush we’re putting on the living standards of the unemployed," Richardson said.
But Scott Morrison may be more likely to spend that extra cash flowing in, on rolling out more tax cuts.
“Better news for the budget suggests more money in the bucket ahead of an election, it won’t stay there," Richardson said.
“The Government may be looking at things like extra family benefits, maybe even more money for self-funded retirees, part-pensioners and the like.”
While there are some troubling economic trends, Richardson says they are not things that are likely to hurt the budget.
“People think politicians drive the Budget, but it’s almost always the economy in the driver’s seat," he said.
“Although the economic news is getting worse, it’s actually getting worse in things like housing prices, things that don’t matter much for the Federal Budget.”
Richardson has laid out his predictions for the 2019-20 Budget, due on April 2.
“The dollar size of the economy is set to be even bigger than the Treasury estimates that were released in late 2019," he said.
He said the Government is set to get an extra $2.3 billion more than expected from company tax and save $400 million because unemployment has been lower than predicted.
The biggest threats he identifies to the economy are the chaos of Canberra and economic instability in China.