21 May 2024
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What we know about tonight’s big punt Budget

Peter Switzer
14 May 2024

It’s Budget day and Dr Jim Chalmers has been the first Treasurer in a long time to hold back the tide on what would normally be a long list of  Budget ‘leaks’. How do I know this? Well, we don’t know as much about tonight’s Budget as we usually do on the morning of the second Tuesday in May.

That said, let’s do a quick rundown of what we do know, assuming Dr Jim will hold the best for most people/voters and the worst for some people until tonight. What the Treasurer announces gives me something to talk about tomorrow! Of course, that story primarily will be on my assessment of the Budget’s hit on the economy, inflation, and interest rates. And then there are those individuals who allegedly have been getting it too easy from taxation laws and superannuation rules. And then there are the implication of any of these changes on the stock market.

Here's what we know so far:

  1. The latest leak is that the Treasurer will crow about a $9.3 billion surplus, which is about $10 billion better than forecasted in the mid-year review.
  2. The surplus will be challenged in future years by lower commodity prices, slower wage rises and a softer economy.
  3. The changed stage 3 tax cuts.
  4. Help for those challenged by high energy bills.
  5. The continuance of rental support.
  6. A better MyGov experience.
  7. An improved palliative care program.
  8. Tax concessions, direct subsidies and grants aimed at new industries for industries/businesses in the tech and green space.
  9. A billion dollars for a solar panel plant in the Hunter Valley and another billion for a quantum-computing facilityin Brisbane.
  10. The SMH says there is “$3.25 billion towards Melbourne’s north-east road link, $1.15 billion for a Sunshine Coast rail link and $1.9 billion for a series of projects across western Sydney”.
  11. A change to the indexation arrangements for Higher Education Loan Program debts that will cost $3 billion.
  12. There will be support for domestic violence victims.

This seems like a lot of small picture stories that could have huge impacts on individuals. More will be revealed tonight but, inevitably, it will be the big picture of how this Budget hits the economy in the next year that will take centre stage.

Why is next year important? Well, Dr Jim has made the courageous decision to tip that the current economy plus his Budget will deliver inflation inside the 2-3% band by year’s end and that should set the scene for interest rate cuts, I’d say by Cup Day in November.

If that doesn’t happen, the Treasurer’s Budget predictions will be compared to what predictably you’d find on the floor of a stable at Flemington on the first Tuesday in November.

And as someone who knows the economy needs rate cuts, I hope this ‘crappy’ possibility doesn’t come to reality.

No matter how you vote, given the big impact of a Budget on the lives of Australians, you have to hope that the public servants in Treasury have helped Dr Jim create a fiscal document for tonight that creates a better economy for all of us!

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