Budget 2016: Real reform or political platform?
We’ve seen governments ‘pledge and spend’ – but is it affordable?
With the Federal Budget due to be released at approximately 7.30pm (AEST) on Tuesday 3 May 2016, it now seems like we’re in a ‘de facto election campaign’. There’s a lot of talk about a July 2 election; something that won’t be announced until after the budget.
In this video, we explore the clear divide in the economic policies of the two sides of politics.
In terms of the underlying economics, the key is focus on:
- Providing enough incentive in the economy: if we increase tax hikes, particularly from middle-to-high income earners, we will implicitly be taking Australia’s tax rates into even higher levels on a global basis; this may prove to be a drag on growth
- Finding ways to limit government spending; over the past few years we’ve seen Australian Governments ‘pledge and spend’ where they promise spending on things that all sound very good but ultimately may prove to be unaffordable
About the author
Shane Oliver, Head of Investment Strategy and Economics and Chief Economist at AMP Capital is responsible for AMP Capital's diversified investment funds. He also provides economic forecasts and analysis of key variables and issues affecting, or likely to affect, all asset markets.