Economic overview

Federal Budget 2018-19

The Government is very keen to push its economic credibility in this Budget - to the point that the Budget website is very glossy with a lot of 'good news' messages:
  • An economy in its 27th year of growth
  • Keeping taxes as a share of GDP within the 23.9% cap
  • No longer borrowing to fund everyday spending from 2018-19
  • Government payments as a share of GDP return to below the 30-year average of 24.8% in 2020-21, the first time since 2012-13.
  • Forecast budget surplus in 2021-22
The budget forecasts real GDP at a generous 3% from 2018-19. Total business investment is expected to be 4.5% in the current year (2017-18), before reducing back to 3% next year and then rising again to 4.5%.

CPI is expected to increase marginally from 2% to 2.5% in 2019-20.

Employment is flat. The wage price index is expected to be 2.25% this year before slowly increasing to 4.75% in 2019-20. Unemployment is expected to only reduce marginally to 5.25% from the current 5.5%. The participation rate is also not expected to increase (65.5%).

Many commentators have already pointed out that the budget forecasts the economy to have a quite remarkable growth spurt from its recently achieved gains.

Want to find out more?

Here's what's in the budget for:

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This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.

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