Mid year budget with economy struggling

Okay - so it's not in a death rattle or gasping on the floor, but haven't seen real wages growth in 4 years and CPI is well below the ideal 2%

Great to see the proposal to bring forward infrastructure spending ... although it would've made more sense to manufacture more of our large scale domestic needs (trams, ships, trains etc) locally ... I do have to question the Government talking about bringing in further tax cuts when, honestly, a tax cut to people like hubby and I (very middle income with no form of government assistance) would mean nothing more than another $20/week in the pocket that would be unnoticed and probably go into the general slush fund of savings/mortgage/holiday etc ... whereas another $20+/wk to those on Newstart or aged pension would 100% be spent straight into the economy and generate more of an immediate stimulus

Thoughts?

Mid-Year Economic and Fiscal Outlook | Budget 2019-20

MYEFO cuts 2019/20 budget surplus to $5 billion

 

Really poor result.

But for Australia...

Here is the long term graph for unemployment.

Source: ABS, Labour force survey, Australia, cat. no. 6202.0, Table 1, Trend.

 

And for a bit longer term.

 

They need much more than $100Bn over 10 years. Much more. Water, water water /irrigation, irrigation. irrigation .... get nation building @Josh and @Scomo . Then follow it up with High Speed Rail and get our regions growing ...

Provided we have the capability, this should have been a no brainer. Do we lack the capability or is it just a big opportunity missed?

Well , the evidence is pretty clear at the moment... neither the company nor individual tax cuts have done much .... it's not leading to wage growth or meaningful increased consumption. A small Newstart increase of even $10 per week would have a better chance of actually slushing around the economy.

 

Regarding wage growth it reminds me of one of the episodes of the Simpsons with the hippie version of Ned Flanders and lack of discipline for the children.
" We've tried nothing and nothing works".
Much of the reason for low wage growth are centred around their own policies..
Big business are not going to pay more for labour costs with investors taking top spot through dividends and buybacks.
Many times in the past we have had decent wage growth with a higher unemployment rate than currently.
Giving someone a crappy $1000 is never going to make up for 7 years of really low wage growth.

 

The rate of Newstart is abysmal. Personally I believe that unemployment benefits should be increased by at least $50 a week. However, I would be very reluctant to raise the Aged Pension despite the short term benefits it may provide to the economy- People need to be encouraged to save/invest/plan for their own retirement, particularly since Super has now been around for 27 years!

 

And to counter, the pension is only accessible from 65, where as people can be on newstart/dole their entire lives...

And pensioners have no chance of bettering their position, so therefore are much more vunerable than those on Newstart...

 

Newstart Allowance - How much you can get - Australian Government Department of Human Services

A single person on Newstart receives $559 per fortnight (approximately $14,534 per year). At least most pensioners own their own homes unlike Newstart recipients...

 

I agree it's too late for people already on the Aged Pension. However, super has been around for 27 years now. For anybody currently under 50 they will have had compulsory super for their entire working lives. For people who are self-employed it's up to them to set aside part of their wage for Super. The pension does take assets into account, but the major asset (PPOR) is completely excluded. It would be political suicide for any major party to include the PPOR in the Aged Pension assets test so this is unlikely to change. However, I can see policy makers making changes to the Aged Pension in the future. An easy way to start would be to peg the Aged Pension against inflation instead of wages.

 

Should compare earning potential.

Just because you have a family home doesn't mean you can afford to maintain it...

Rates/repairs, replacement of failing hotwater/aircon, cleaning gutters, maintanence being old means your body doesn't work as well, can't climb ladders, get on roof, get in roof spaces etc.

Also you're talking about tax payers paying into a system that is there to support them when they can no longer work, new start is for those who potentially haven't paid any tax in their life, could still be living at home and are getting a leg up.

Newstart isn't meant to be a living wage, it isn't a wage.

Pension is supposed to be able to be livable as it may very well be the only way some old people are able to get any money at all.

You want to punish people that are old and may rely solely on the pension, because what, every pensioner worked a well off job and had the potential to save for retirement, sounds like an extremely broad over generalization, wasn't there any under-employment casual jobs in the past, is that some new coup against young people?

 

A large percentage of people on Newstart are over 50.

Lost their jobs, unable to find employment, too young .. and asset rich ... to access super as may own their home (super can only be accessed early as an emergency and you pay a shot load of tax) ... anyone over 50, without specialised skills or new to the workforce (ie, women who are recently divorced after a lifetime of bringing up the children), will know it's not easy to get a job and Newstart is what you're paid while you "retrain"

 

Wait till the repo situation starts to hit in 2020

 

Would that be good or bad?

 

Don't know about a mini Budget but

Jeanswest into administration
Curious Planet into administration
McWilliams Wines into administration
Mosiac Brands into administration.
Harris Scarfe in difficulties.

Probably more.

Any pattern? Nah, none that I can see.

 

Also the nature of retail has evolved a lot. We went from the local corner shop and specialist stores and regional community village style living to large shopping centres and then with a combination of increased rents, overseas competitors, reduced protection and online business has made traditional local business hard to conduct with success. A customer will come into your shop to try on an item and then buy it online cheaper from overseas. As a nation we also seem to be moving towards buying services instead of products.
Being a much more open and global economy with less protection is why wages have not grown. Usually wages go up when there is full employment and employers are desperate to keep employees but now with AI and global exposure, this has changed things. Woolworths are planning to have no check out operators by the end to the decade.
I also think that things could get worse as some countries start talking about having a 4 day working week.

 

Australia: Retail disappoints in the lead-up to Christmas – ANZ

Data from ANZ card transactions over the Christmas period showed sales were down more than 5 per cent between December 16 and Boxing Day, compared to the same period in 2018.

 

There is no doubt that being unemployed at any age or living solely on a government pension is a good deal. I guess you could increase payment and see how you go.
Long term, however it concerns me that schools do not spend enough time on teaching financial literacy to children to prepare them for life. I was reading the post of one property educator who had approached about 20 schools offering financial education courses to the students and only one school took up the offer.
I do think Sydney, Melbourne and Canberra have property values that are so expensive that it stops you from spending or investing money elsewhere.