The Abbott Government’s first budget had some bold ideas and some big plans to fix the deficit but it was poorly sold and went down like a lead balloon with the public.
Indeed the budget leaks and then the release of the budget was tied to the crash in the ANZ’s weekly consumer confidence measure.
Equally the bounce back in confidence according to the ANZ has been a result of the “senate ructions” which mean a large swathe of the budget won’t get through.
But while the Senate opposes and the Government vacillates – or appears at least to be heading down that road – Bank of America Merrill Lynch’s chief economist Saul Eslake is suggesting it’s time for a new set of budget measures to be put forward by Treasurer Hockey.
“Ideally, in our view, the Government could consider a different mix of revenue and spending measures in order to achieve the same ‘bottom line’ outcome”, he wrote in a note released Wednesday titled “The Abbott Government’s budget problems”.
If not the budget deficit is going to be far larger than currently forecast and on the day that treasurer Hockey has hit out at business for a lack of support for his budget Eslake says the problems coupled with much bigger deficits could undermine business confidence.
The key according to Eslake is that “in our view, Australia’s fiscal problems are of a long-term nature rather than immediate, the Government does have time on its side”.
So, Hockey, the message from Eslake is there is no need to rush and try to do this all at once.
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