Forecasts in the May Budget showed wages increasing nearly 50 percent faster than the inflation rate for the next four years. How reliable are Treasury’s wage forecasts?
The media coverage of last week’s Budget has emphasised its petty nastiness such as the removal of the tax exemption for newspaper girls and boys, and the move to stricter assets tests for people needing support when going into residential aged care.
The Government’s Budget will be announced on 24 May. There have been surprisingly few pre-Budget announcements so far. The main one was that there will be a near-zero “operating allowance” for new spending rather than the already very low $800 million the Prime Minister was confident about as recently as February. This is a worrying development.