As the dust settles on the budget announcement, small business advocate and Kochie’s Business Builders TV host, David Koch, suggests the most important thing to come out of 2023 budget announcement is we won’t have an economic recession.
Yes, the economy will slow, but it won’t go backwards, and I think that’s a good sign.
With unemployment sitting at a 50-year low of just four and a quarter per cent, the job market is still going to be strong, and my view is the same as that of a lot of analysts. we are probably at the peak of the interest rate cycle after the increase last week. So, I don’t believe the spending on cost-of-living allowances, the Medicare bulk billing, or the rise to Jobseeker will add much inflationary pressure. So I don’t think it will impact interest rates moving forward.
The other overwhelming observation I have for this budget is, God, we are in a lucky country, aren’t we? When you consider what we’ve had to rebuild after the pandemic and the amount of revenue that is coming in, particularly from commodities, I predict we could even have a good chance of a budget surplus next year.
I predicted last October we would have a budget surplus this year. I even felt so strongly about it I bet a bottle of red wine on it with Jim Chalmers. So, we’ll have to wait and see how that pans out.
Overall, though, I feel like this budget has been a bit of a lost opportunity for the government. Jim Chalmers paints himself as a treasurer who almost models himself on Paul Keating, the great reformer. He wants to be a reforming treasurer… So I thought there’d be a lot more tax reform in this budget…. Get it over and done with within the first year of a new government and then you can build around it in the future but that wasn’t the case.
Still given the circumstances, we’re not in bad shape.
Yes, the economy is going to slow down, so we’re all gonna have to be really careful on cost and re-engineering our businesses. But I think there will be no more interest rate increases, inflation will start to come down a bit and there will be no real wage growth because I think inflation will be stubborn for the next financial year.
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