Australia was set to unveil a “practical” budget today focused on infrastructure spending and housing affordability with the government “listening” to frustrated voters. Treasurer Scott Morrison said it would reflect a government “living within its means” as he attempts to deliver a previously pledged surplus by 2020-21. “We understand that while Australia has grown ahead of large advanced economies in the world and that our national growth against strong headwinds has been impressive … that not all Australians have felt the experience of that growth personally,” he said. “We understand that many other Australians feel frustrated that they’re not getting as ahead in the way they would like to.”
A hot topic heading into today’s evening’s budget has been an overheating property market, fuelled by interest rates being slashed to record lows to boost growth as the economy shifts from a dependence on mining-driven expansion. While Australia is one of the best-performing developed global economies, soaring house prices, coupled with low wage growth, has also made it a world-beater in household debt. Morrison has hinted at a package to tackle affordability and help first home buyers, while foreign investors could be slugged with new fees if they leave their investment properties empty.
“You can expect me to seek to address those issues tonight,” he said, adding that it would be a “practical and honest” budget. Pumping money into infrastructure projects to create jobs and guarantee essential services has been another key theme in the lead-up. The government has already announced it will bankroll the construction of a second airport in Sydney and billions of dollars are also expected to be committed to building an inland freight rail line between Melbourne and Brisbane.
Among other measures, defence spending is expected to be hiked while the Australian Federal Police will get more than Australian dollars 300 million (USD 220 million) in extra funding to help counter growing security threats, funded by cuts to foreign aid. Less popular is likely to be a fee hike for university students. While the government has a keen eye on the electorate, with the popularity of Prime Minister Malcolm Turnbull waning, it is also wary of a possible cut to its coveted AAA credit rating.
In a fiscal update in December, Canberra revised down the nation’s cash deficit of Australian dollars 37.1 billion in 2016-17 — as announced in the last budget — to Australian dollars 36.5 million. But it forecast widening deficits in the next three years before a return to surplus, which saw Standard and Poor’s warn the rating could be lowered if the government does not improve its budget balances and deliver on the surplus plans.