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