Federal Treasurer Scott Morrison has highlighted his own grandparents’ struggle of buying a home to show the pressure on the Sydney housing market has been around for generations.
“All they ever knew on my father’s side was renting a house in Sydney, could never buy a house,” Mr Morrison said.
“They grew up [and] were around in the 40s, 50s and 30s in Australia. So it has been a long-term issue in Sydney.”
It’s expected housing affordability will be a focus of Mr Morrison’s second Budget, however, he insists the government will be addressing the whole spectrum of housing affordability, including the rental market, as well as social housing.
Morrison: We must make the right choices
“If you don’t have a roof over your head this you can rely on, every single other problem you have in life gets harder,” he said.
The Treasurer said the Budget will be about “making the right choices” to support the Australian economy.
“By ensuring we grow our economy, we are able to guarantee the services that Australians are relying on,” he said.
Mr Morrison reiterated his concerns about slow wages growth, but insisted higher pay rates can only be delivered if the economy grows and all businesses get a tax cut.
The government plans to introduce the second half of its business tax package when Parliament resumes next week.
“You can’t get a pay rise in a business that’s going backwards and it isn’t making a profit,” Treasurer Morrison said.
Morrison’s ‘good, bad’ debt claim under fire
The university sector is expected to have to tighten their belts as funding outpaces the cost of educating students.
Education Minister Simon Birmingham is expected to outline a Budget package that includes funding cuts and hikes in student fees later on Monday.
Mr Morrison was vague on the Budget outlook after a prominent economist predicted the budget will be in a worse position than forecast in December, raising concerns the government won’t be able to achieve a promised 2021 surplus.
“Those numbers will be updated on Tuesday week,” he said.
SBS chart showing Treasury’s deficit projections compared with Deloitte’s.SBS / James Elton-Pym
A leading Australian economist has warned a $100 billion boost to national income this year will not be enough to stop a worsening in the Budget figures next week.
The income surge is a product of a stronger Chinese economy and two Reserve Bank interest rate cuts last year, according to Deloitte economist Chris Richardson.
Mr Richardson said the boost would likely improve next year’s forecast, but said he still predicted a worsening in the projected deficit over the following two years due to Treasury overestimating tax collection.
“Treasury is still of the view, and it may be right, that the tax system will get a bunch healthier in the next few years,” he said.
“In the last seven years, total revenue went up by an average of $17 billion a year. In the next three years, Treasury says it’ll jump to $30 billion a year – not because of a decision to tax more but because of underlying repair in the tax system.”
The Treasurer hinted to reporters the government may dump so-called “zombie” savings measures from the budget papers.
“It is important the Budget is a credible document, a practical document… that can be put forward with confidence to the Australian Parliament for support,” he said.
As of March 31 there were $12.7 billion in unlegislated Budget savings slated for the next four years, some of which have been blocked by Parliament since the Coalition’s May 2014 Budget.
Mr Richardson warned Australia’s pursuit of “bad” spending will catch up with it.
“We have a bunch of bad spending now well and truly cemented in place,” he said.
“If we are really not going to do something about spending we are going to have a look at taxing.”