2023-24 Federal Budget: A high-wire balancing act

MyState Bank CEO Brett Morgan said the 2023-24 Federal Budget was a high-wire balancing act that’s attempting to tread a fine line between helping Tasmanians while not stoking the inflation fire.

“There’s no question that many Tasmanians are doing it really tough right now, and they deserve their share of the near $15 billion cost of living package in the Budget,” Mr Morgan said.

“But the tough question is whether this short term gain in hip-pocket relief for some, will cause long term pain for all by stoking inflation.

“This is a high-wire balancing act.

“Whether the Budget can pull off this mission-near-impossible, only time will tell. But a good first test is only weeks away when the RBA examines inflation and considers interest rates in June.”

Mr Morgan said there were several cost of living relief measures in the Federal Budget that would be welcomed by Tasmanians.

“The $45 million in Energy Price Relief Rebates will bring hip-pocket relief to up to 140,000 Tasmanian households, and the timing couldn’t be better as winter approaches,” Mr Morgan said.

“The boost to Commonwealth Rent Assistance, the tripling of GP bulk billing incentives, and increase to JobSeeker will also bring welcome relief to many Tasmanians struggling to afford housing, healthcare and every day costs of life.

“Every dollar counts, and these budget measures will help many Tasmanians to make ends meet at a time when the cost of living and inflation are making that harder and harder.

“It will however be important to keep watch on any potential inflationary pressures from the budget, particularly after rising energy costs proved a key driver of Hobart’s 1.2 per cent inflation hike in the March quarter.”

Looking nationally, Mr Morgan said that while it was good to see Australia’s economy had performed better than expected, any return to being back in black may be short lived.

“It’s good to see a projected $4.2 billion budget surplus, on the back of record employment and a commodity windfall,” Mr Morgan said.

“But the Budget forecasts have confirmed several challenges ahead, with unemployment growing from 3.8 per cent to 4.5 per cent by 2025, a slowing of the economy with Real GDP slumping from 3.7 per cent to as low as 1.5 per cent next year, and growing cost pressures on the budget from Government debt, NDIS, health, defence and aged care.

“With the backdrop of the international economy adding extra uncertainty, now is the time for the Federal Government to bring certainty to Australians with responsible spending, structural reforms that support productivity and growth, and a laser-like focus on taming inflation.”