According to Cherelle Murphy, analyst at ANZ, in the forthcoming Australian Federal Budget 2019-20, underlying cash balance estimates will be revised positively and personal income tax cuts and infrastructure spending will be announced when the budget is handed down at 7:30pm AEDT on 2 April.
Key Quotes
“Stronger than expected commodity prices and employment growth have lifted tax receipts, while payments are lower relative to Treasury’s expectations.”
“When combined with the tax cuts announced last year, we expect tax relief to be on average around $12 a week for workers in 2019-20 and under $2 a week for the following financial year.”
“The ALP’s budget reply speech is on Thursday 4 April. If, as polls predict, it wins the coming election, fiscal policy is unlikely to change dramatically but personal income tax cuts would likely skew to low- and middle-income earners.”
“We do not expect fiscal changes to cause rating agencies to revise their triple-A stable credit rating for Australia, regardless of the election outcome.”
“The RBA is likely to welcome income tax cuts, preferring this stimulus over a lower cash rate, which would not address household’s credit supply constraints.”
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