Australian budget curbs spending but dodges reform

Significance

This seventh successive monthly increase takes the RBA’s benchmark cash rate to a nine-year high. With inflation now expected to exceed even the more recent RBA forecasts, further rate rises are likely.

Impacts

• Multinationals and foreign resource firms will be targeted as the government closes tax loopholes.
• Structural risks such as climate change will drain revenues and deepen fiscal imbalances.
• Prioritising fiscal discipline instead of rising living costs will cost the government political support.