Budget may give Australian government little help

Significance

Anchored by cash handouts and tax relief for consumers, Frydenberg presented the budget as the next phase of a post-pandemic economic strategy but many of its provisions have strong political overtones that should assist the Liberals and the Nationals, their partners in the governing coalition. The next general election must be held by mid-May.

Impacts

• Projections in the budget could change, as the Labor Party will review all funding allocations if it wins in May.
• Frydenberg’s ambitions to succeed Morrison as coalition leader will get a lift from his astute fiscal management.
• Despite tax cuts, the failure to address rising living costs and static wage growth will hurt the government’s re-election hopes.