A leading budget-watcher is forecasting a Donald Trump presidency will not have a significant impact on Australia’s federal budget.
The Deloitte Access Economics budget monitor released today also found national income has been recovering more slowly than the Federal Government’s budget forecasts predicted.
The report’s author, Chris Richardson, said coal prices were driving growth but many of the factors behind that were temporary.
He said two thirds of the national income came from taxes on wages, and that was where the problem was.
“Just last week we heard a new record low for wage growth in Australia, job growth has faded as well,” Mr Richardson said.
“They aren’t keeping up with the budget forecasts for them.
“It looks like this year and probably the next few years thereafter we will fall shy of the budget forecasts.”
Trump ‘unlikely big news’ for Australia’s economy
But in looking to Australia’s future bottom line, Mr Richardson cautioned against overstating the potential impact of a Trump administration.
Mr Richardson said the area where Mr Trump could hurt Australia’s economy would be trade.
But he said overall, people should not panic.
“The chances are that policies will change, but what will change will be slower and smaller than you’ve heard in the campaign,” he said.
“By and large, President Trump is unlikely to be big news for the economy of Australia.”
Mr Richardson said the growth of other nations such as China had lessened the impact of US policies on Australia.
He said an ongoing concern was the cost of the Federal Government failing to get a backlog of budget measures through Parliament.
Mr Richardson said the Government’s omnibus bill was helpful, but its benefits were limited.
“People don’t like to hear that the Australian budget needs more work,” he said. “It is just maths. As a society we need to come to terms with spending cuts and tax increases to get us to a more sustainable state.”