What the Federal Budget means for you and me on a daily basis isn’t terribly much, according to a seasoned economist.
Despite the headlines and commentary about tax reform and aged care assistance, Head of Research at Business Insider David McDonald explained that other factors influence our hip pockets, loan repayments and job prospects.
“Frankly, the Federal Budget has less of an impact than a lot of other things happening in the economy and globally,” said former investment manager and economist McDonald, who has more than 30 years of experience in the finance industry (including being Chief Investment Strategist with Credit Suisse).
“There was some small things around aged care which I think are definitely good things.” – David McDonald
“I think that for most people, it sounds like the tax cuts will equal about $10 per week and that should help a little bit and should boost their confidence …. But other than that, the fact that during the next five or ten years we might have roads that are a little bit better, or we might have more trains, doesn’t make dramatic changes to people’s lives.”
McDonald told Eternity that what could dramatically change our lives are interest rate rises or the possible trade war between the USA and China.
As he downplays its significance for everyday Australians, McDonald’s first reaction to the latest Federal Budget was “lack of surprise because 90 per cent of it seemed to be leaked ahead of time.”
However, McDonald was impressed with Treasurer Scott Morrison’s announcement of widespread tax reforms, increased spending on infrastructure (roads, airports, railways) and aged care programmes. Given that our Governments tend to constrain planning to within three-year election cycle in Australia, McDonald modestly commended the Turnbull Government’s longer-range proposals.
“From a moral standpoint, I’m not very impressed with the Government’s intentions of boosting Defence exports.” – David McDonald
“There was some small things around aged care which I think are definitely good things,” highlighted McDonald, who attends St Alban’s Anglican Church in Lindfield, Sydney. “Helping older people to stay in their homes longer and [allowing] people to earn a little bit more without losing their pension. Given the demographic change in the country, you really need to focus on those areas.”
McDonald described as “wasteful” the proposed $50 million for space exploration and $140 million to lure Hollywood movies to Australia. He believed our Government could do more to improve the lives of Australians and people around the world, such as increase funding for mental health services, as well as bolstering the level of Newstart allowance or Australia’s foreign aid budget.
“From a moral standpoint, I’m not very impressed with the Government’s intentions of boosting Defence exports and making Australia a manufacturer of warships and weapons. I think we could do better things for the world than growing armaments.”