ANZ: The Government's Fiscal Consolidation Plans Will Struggle To Pass The Senate

The Senate tug-o-war really begins this week. (Photo: Getty Images)

The Abbott Government has managed to secure “Supply” in the past week.

But there are still many of its Budget initiatives that, with the change in Senate numbers that come into effect on July 1, seem at risk, according to the ANZ’s economic team which wrote this in its Monthly Chart pack:

The Commonwealth’s 2014-15 Budget, which projects an improvement in the underlying cash deficit from AUD49.9bn in 2013-14 to AUD2.8bn by 2017-18 is facing a number of hurdles. Opposition and cross bench Senators, whose votes are crucial for the Government to pass legislation through the Senate, have indicated they will vote against or seek amendment to many policies.

They also highlight the shifting positions and backflips that cross-bench Senators have shown, meaning that the “destiny of all the budget measures cannot be known at this stage”.

Further, in what is genuinely bad news for the economy, the ANZ says that:

The Government’s fiscal consolidation plans will be watered down unless, which seems unlikely, it can garner six extra votes for every measure. While in aggregate this could mean economic headwinds from fiscal policy are slightly tamer, it is also possible that business confidence could be eroded by the perceived lack of control that the Government has over its own legislative agenda. Consumer confidence, meanwhile, remains a solid 9% lower than at the end of April when news flow around the Commonwealth Budget began.

Here is a great bunch of charts the ANZ thinks are worth a look:

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.