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February 21, 2024

The Labor govt just dropped the mic on its first budget in 10 years... and we have some major winners... and losers

The Labor government just dropped the mic on its first budget in a whoppin' 10 years.

What's the key learning?

  • Some of the biggest costs of the Labor government's budget came from: NDIS, Healthcare, Aged care, Defence, and Interest on debt.
  • The Labor government has forecasted that the budget deficit will actually shrink from the predicted $78 billion to $36.9 billion, and the $41 billion reduction is mainly thanks to soaring commodity prices and low unemployment.
  • Australia currently has the lowest unemployment rate in almost 40 years, which means more employees are paying income tax and more companies are paying company tax.

👉 Background: This budget was the Labor party's first budget in a whoppin' 10 years. TLDR; the budget sets out what the government is going to spend money on and where it’s going to generate that money from.

👉 What happened: In this budget, some of the biggest costs came from:

  • NDIS
  • Healthcare
  • Aged care
  • Defence
  • Interest on debt

👉 What else: The good news is that the Labor government has forecasted that the budget deficit will actually shrink from the predicted $78 billion to $36.9 billion. This $41 billion reduction is mainly thanks to soaring commodity prices and low unemployment.

What's the key learning?

💡While inflation may be bad for the broader Australian economy and our personal budgets, it actually does good things for the government’s budget.

💡Here's the thing: Australia currently has the lowest unemployment rate in almost 40 years. While that’s not ideal for inflation, it means means more employees are paying income tax. And more companies are paying company tax.

💡On top of that, commodities (like iron ore, coal and gas) are mostly priced in USD. And right now, the USD is absolutely booming - so a weaker AUD delivers more in local currency terms. And of course also boosts tax revenue paid by miners. Kaching!

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