Treasurer’s Economic Theory Undergoes Testing

The government touts its budget as a targeted tool to combat inflation, but economists caution that providing widespread cost-of-living relief, such as energy rebates and tax cuts for all, could potentially exacerbate the situation. An enhanced version of the energy bill relief introduced in the previous year’s budget, along with an additional increase in Commonwealth Rent Assistance, is anticipated to help curb the consumer price index. According to Treasury estimates presented on the evening of May 14, these measures are projected to bring down inflation by approximately 0.5% in the upcoming fiscal year, offering potential relief by the holiday season. Cassandra Winzar, the chief economist of the Committee for Economic Development, expressed concerns that distributing cost-of-living relief through non-means-tested initiatives like the stage three tax cuts and energy bill assistance may conflict with the objectives of the central bank.



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