Updated: Apr 17, 2019
It’s budget eve, and the word is tax relief (which does not necessarily mean tax cuts). According to the ABC, we can expect relief measures for people earning between $37k and $126k. So far, we know this is likely to include one-off payments for low income households to offset rising energy costs, relaxation of super rules to allow for more voluntary contributions, and an increase of the 19 per cent tax bracket from $37k to $41k. Whatever is unveiled in tonight’s budget lockup in Canberra, fiscal responsibility won’t be it. This is a political budget, which the government will try to “ram through” Parliament this week and push the idea that Labor is opposing them, whether the opposition does or not. Shorten wouldn’t be drawn on commenting on specific measures yesterday, citing he was yet to see them – but in the always-fun game of Who Holds The Larger Swag, went on record saying that whatever the government is proposing, Labor’s cuts are bigger. Economists will be watching closely for stimulus measures to arrest the cyclical downturn, but apparently aren’t hopeful that whatever is introduced tonight will be enough. Infrastructure Partnerships Australia will also be sitting fingers-crossed outside the lockup; it’s looking for an extra $2.5 billion a year in infrastructure spending to make up the “shortfall”. This seems a dim hope given most infrastructure responsibility lies with the states. Meanwhile, Domain has released research showing how long it currently takes to buy a first home. In Sydney, it currently takes five months less to save for a deposit – which, if coupled with lower-cost housing products that fall below the cited entry point of $650k, is great news for anyone offering a competitively-priced FHB product or service. The HIA also released figures yesterday, on new home sales. They’re up in VIC, SA and WA, but down in NSW and QLD. If you were hoping to find positives here, the HIA isn’t going to help you…they’re calling any positive figures a “dead cat bounce”, saying we have another half-year of declines in store. This isn’t great news for Sydney in particular, which has seen prices drop 13.9 per cent from the July 2017 peak. To round out the industry analytics, NAB’s Business Survey results show that business profitability and employment conditions have improved, but confidence is in the gutter ahead of the budget and federal election. Let’s hope that improves after tonight.