The entire budget is founded on the assumption of a bright future. Frydenberg,ebullient as usual,would not countenance any threat from the latest strain of the coronavirus.
“We’re not going to see Omicron derail the recovery,” he said on Thursday.
The latest jobs numbers seem to justify that confidence,with an astonishing 360,000 jobs created in November when economists were tipping 200,000 and Treasury said the same. It could be a long time before Australia sees a single month like that again.
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The Australian economy is bigger than it was before the pandemic and the country has 180,000 more people in work than before the pandemic. This is a strong foundation for the Coalition at the election but it comes with a downside:lower real wages this financial year.
With inflation on the rise,Labor treasury spokesman Jim Chalmers can go to the campaign telling households their incomes are falling. The forecasts actually show real growth after July next year,as well as enviably low unemployment,but that is the world after the election. Chalmers will want people to vote on today’s reality rather than tomorrow’s promise.
The forecasts will be out,of course. The budget is hostage to a virus that mutates faster than a Treasury spreadsheet. So the mid-year fiscal and economic outlook released on Thursday suffers from the recurring problem of Australian budgets:banking the promise of better times ahead.