It’s about as clear as mud today.
“At the front end of the budget, there will be a primary focus on inflation. Towards the latter years of the budget, there will be more of a focus on growth,” he told reporters in Canberra.
“It will be an inflation fighting and future making budget. There will be cost of living help for people doing and there will be key investments in a Future Made in Australia.”
However, economists warn against a budget that could delay the Reserve Bank of Australia’s target band of 2% to 3% until mid-2026.
The budget’s forecasts for inflation will be compared to the RBA’s updated forecasts, which won’t include budget measures.
Labor will be held responsible for any gap that signals the budget will add to inflation and cause interest rates to stay higher for longer.
The budget will also face “unavoidable” spending measures, including MyGov, front-line staff for Services Australia, and major government IT projects.
My best guess is that Chicken Chamlers will release a new round of utility and rent subsidies, which will help bring down the CPI.
However, it will also considerably increase future deficits, given that neither actually solves any of the underlying inflation pressures.
Why we will try to make solar panels in Australia at twice the price of imports stumps me.
That is double inflationary, inefficient, and doesn’t contribute much, if anything, to sovereign capability given the IP will come from overseas, likely China, or from elsewhere, making the expense even worse.
I’m all for made-in-Australia, but if you’re going to do it, fix the cost base in energy and expertise. That is the major reason that it is not already happening.
Charging taxpayers to fill the competitiveness gap makes it wider still!
Finally, Chalmers is still running structural deficits based upon commodity windfalls, and if, as I think, iron ore and coking coal are headed down the gurgler, then excess spending will need to be savagely cut, turning the entire shaky edifice into a collapsing scab grab with solar panels at the bottom of the pile.
