Budget good for 'struggle street': Bouris
Businessman Mark Bouris says the budget is good for people on ‘‘struggle street’’, but warned that there are big assumptions underpinning Treasurer Wayne Swan’s funding of the largesse.
‘‘For families the cash payments are going to be a good neutraliser for all the expected costs going forward, but that money has to come from somewhere.’’
‘‘The danger is these budgets get marketed to people about how it affects us individually, and we forget the real issue is whether the assumptions come true - because if it doesn’t, and it falls short, its going to affect everybody, not just the people who are receiving the handouts,’’ he told BusinessDay today. ‘‘The big issue issue is, are the assumptions conservative enough?’’
While the government had made a call on domestic growth, and while the Reserve Bank was confident of 3.25 per cent growth, the bank also recognised the external risks of the ongoing eurozone crisis. ‘‘You need that growth or they won’t collect enough revenue for the government to make the payments they are talking about,’’ Mr Bouris said.
‘‘At a domestic level the assumption is that people who are losing their jobs in manufacturing and retail and tourism can relocate into the mining demand, and that assumption doesn’t necessarily play out in the short term.’’
It was also a very big assumption that when the carbon price floated in 2015 that it would remain at $29 a tonne, given most commentators predicted a much lower level.
Finally, the government was assuming that it would be able to stay in power to execute its budget measures, which was a ‘‘bit of a slippery footing’’, he said.