This week, the federal budget will focus on means of maintenance costs-and more uncertain global economy

Treasurer Jim Chalmers will reduce the federal budget on Tuesday.

Probably most of the main expenditure initiatives have already been announced. Additional Expenses at Medicare in the amount of $ 8.5 billion It will strive to assure that nine out of ten GP visits will be burdened with mass on 2030. Bruce Highway in Queensland is to be improved with the Albanian government Ensuring $ 7.2 billion from the cost of $ 9 billion.

In the speech last week, Chalmers promised “significant and significant” relief.

He also emphasized that the global economy is more unstable and unpredictable. He said that the lower budget line would not be changed much in relation to the update in the middle of the year published in December, when it was forecast that the deficit was $ 26.9 billion this year.

It was a comprehensive attempt of clothing for tomorrow’s budget speech.

No rabbits from the hat

Australian budgets are today well marked in advance in such speeches. This is intentional. This is a sign of responsible fiscal management to have few surprises, positive or negative.

Over the past decades, the treasures have been willing to announce funds to surprise. Not anymore. The justification for the rejection of the “rabbit from the hat” was determined by the former treasurer Wayne Swan in 2008 Budget blocking press conference: He said that the budget must be “responsible”. Chalmers was then the deputy chief of Staff of Swan.

It means connections by economists such as Chris Richardson AND Ken Henry Because a sedate tax reform is unlikely.

Influencing the brackets (an escalate in tax revenues as taxpayers go to higher tax ranges) performs most of the work in the very gradual wind of the budget deficit. In the budget update in the middle of the year it was expected that returning the budget for balance.

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Read more: If the treasury forecasts are appropriate, it can be a decade before Australia returns black ”

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Good luck, not good management

Not because the balanced budget or surplus is a sign of good budgeting. The driver of the last budget surpluses as part of work and coalition rule was not a government policy, but stronger than expected Freight prices and export. They were accidental, not intentional.

While deficits escalate the debt, imposing costs on future generations, what counts is to pay off the debts. If the economy grows faster than the debt rate, the situation is possible to manage. That is why we will probably see the chart in Tuesday’s budget documents showing it, and the debt is gradually decreasing as part of the gross domestic product with time.

However, these forecasts regarding the lower line Do not contain elements outside the budget Such as special funds for green energy or student debt waste, which according to Deloitte Access Economics in total almost $ 100 billion.

This is due to the fact that the budget covers only the “general government sector” – departments and public services agencies and defense forces. This is not the entire public sector, which includes commercial or financial entities, such as government enterprises, Australian reserve bank and various funds.

On Sunday announced the government Further relief in the cost of living with an extension of electricity discounts, giving households another USD 150 this year. This will avoid inflation of the header above 3%, because the reserve bank is currently forecasting.

The energy discount last year cost the budget estimated USD 3.5 billion in 2024–25. Extending it for six months Cost $ 1.8 billion. Chalmers also promised another reduction in the maximum prescription cost of up to USD 25.

In December, the budget update of the unemployment provided about 4½% in mid -20125 and will remain at this level for the next few years. Considering that the unemployment rate was stable 4.1% in FebruaryThis forecast can be reduced.

It was forecasted that inflation would remain below 3%.

The growing risk of a global trade war will cause some reduction in forecasts of global and Australian economic growth. OECD has decreased his forecasts In the case of global growth and emphasizing that international perspectives are very uncertain.

This means that Australian budget forecasts are more likely to make them mislead. We just don’t know in which direction they will be wrong – will they be too positive or bleak?

What will this mean for interest rates?

The Bank of Bank’s Council is unlikely that it has enough additional information to re -reduce interest rates at the meeting on April 1.

Nevertheless, the government will be confined in how much support can be provided by households. He does not want to undermine the narrative about future interest rates, stimulating too many household expenses.

Something to watch will “make decisions, but not yet announced.” These are additional initiatives that the government will announce during the election campaign. They will be able to answer “Where does the money come from?” The question, saying that they are already included in the budget.

Finally, will there be an escalate in defense expenditure? US President Donald Trump presses on the US allies. The problem is that defense expenses do not concern the political problem of the pressure of living costs-if he adds anything to them.

The potential solution is to support greater defense expenses, but only “basically”, leaving details about future budgets. This would assist manage domestic and international pressure.