The highly respected NAB team of economists conclude:
"While we see the Budget as a credible document, it does little more than bring the Budget (structurally) back to neutrality by 2013/14. One wonders whether it could not have gone further given that (in the Government’s own words) the nation is currently experiencing the largest terms of trade boom in 140 years. As well as preparing Australia to better cope with the strains posed by such a boom (through improving skills and availability of suitable labour and dealing with the multispeed economy), it would have been more reassuring to have seen some thought given to the adjustment phase when the boom eventually peters out. Finally, there is nothing in the Budget to change the RBA’s view that tighter monetary policy is required in the current environment. Nevertheless, the imminent hikes in the cash rate will not help the challenges that face some sectors and states in the multi speed economy."
