A surplus matters less than what choices the government makes in its budget – here’s what Jim Chalmers’ statement tells us
Treasurer Jim Chalmers’ 2024 federal budget includes an increase in rental assistance by 10% and everyone gets $300 off their power bill. Both these measures will reduce inflation.Treasurer Jim Chalmers’ 2024 federal budget includes an increase in rental assistance by 10% and everyone gets $300 off their power bill. Both these measures will reduce inflation., not really.
Four of the budget years have smaller deficits compared with what was predicted a year ago, but three have bigger deficits compared to the Myefo figures. Both these measures will reduce inflation. Rental assistance goes to those on low to middle incomes who are hardly in a situation where they will take the extra money and spend wildly. And the energy rebate is large enough to make an impact on inflation but not enough to significantly affect overall demand in the economy.
Neither 3.2% nor 2.75% should make any difference to interest rates – the next move should still be a cut and the issue of inflation will likely become one of political barracking rather than economics.
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