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Economic Update

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Date: 01/05/2011

The coming Federal Budget could well be a "stinker", perhaps a return to the old days of a tough budget in a government's first year, followed by better times and then some sweeteners before the next election.

After the gloom of the GFC, then a brighter outlook last year, the upcoming Federal Budget could be a "stinker", according to our economist, Associate Professor Neville Norman of Melbourne University. He foreshadows a return to the old days of a tough first-year budget, followed by better times then a round of sweeteners before the next election. That means tax increases, government spending cuts, and slower progress on returning the budget deficit to surplus. And that, in turn, means some shock and horror for business in the short term, but the longer-term implications are good if sensible changes to the tax system are made. The main problem is a fog of policy uncertainty which is causing business to stop investing.

  

Topics: Economy, Financial Management, Management


Professor Neville Norman, Melbourne University