Sunday, May 22, 2022

The election budget for the cost of living: the most important things you need to know

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With inflation soaring, a war in Europe affecting global fuel costs, and continued supply problems, this year’s budget is shaped not only by the upcoming elections, but also by growing community outcry about the cost of living.

But despite some significant multi-billion dollar spending over the next six months, the deficit is projected to shrink significantly from last year (and the 2020 shock) to just $79.8 billion — largely due to factors outside of control. from the government.



While GDP rose as we began to see a way out of the COVID tunnel, the government predicts it will slowly consolidate to around our pre-pandemic levels, the rest of future estimates at 2.5%.



Unlike GDP, unemployment is expected to move further south – and stay there for most of the next four years.



And the predicted further increase in total employment has had an effect.

Despite an international environment of rising inflation and years of wage stagnation, the government is optimistic that the wage price index will catch up with the consumer price index in the 2023-2024 budget.



Despite an apparent explosion in spending this election year (and amid that cost of living in the electorate), the government expects to rein in payments in the coming years as revenue consolidates.



Josh Frydenberg noted in his speech to the Press Gallery that the budget now forecasts gross debt to peak four years earlier than previous estimates – although this is still a long way from the “Back in Black” predictions of its first budget in 2019 .



So what are the major spending – and little cuts – of this large election budget?

While some of them – such as the fuel tax cuts and almost no climate change reporting as NSW and Queensland recover from another disastrous summer – are absolutely against the recommendations of Australia’s Leading Economistsit remains to be seen how they will affect the election.


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