The federal budget is expected to confirm about $730 billion in federal government spending this financial year, which is likely to blow out above 800 billion dollars annually over the next couple of years. Economists are calling for structural budget repair measures to future proof against unexpected pressures. In December, the government projected a budget deficit, meaning it will spend an estimated $26.9 billion dollars more than it earns this financial year and that was before US president Donald Trump imposed tariffs on products like steel and aluminium from Australia. Then, there are unforeseen costs that pop in the budget but have to be accounted for, like propping up the Whyalla Steelworks in South Australia and underwriting the future of Rex Airlines. But don’t expect any major tax reform. Instead, the government has spelled out five priorities – supporting the recovery from ex-cyclone Alfred, strengthening Medicare, investing in education, making the economy “more competitive, dynamic and productive” and helping with the cost-of-living. Stephen Anthony from Macroeconomics Advisory says everything “this government does is about distribution of the pie now, as opposed to growing the pie for the future and making everybody better off in the future. Daniel Ziffer also spoke to EY chief economist Oceania Cherelle Murphy.
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