Joe’s Budget black hole gapes anew

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From the AFR, Treasurer Hockey has begun the Budget leaks starting with iron ore:

“There seems to be no floor. We are contemplating as low as $35 a tonne”…Mr Hockey said the revenue loss from iron ore would be exacerbated by write-downs in income tax revenue, a product of flat wages growth. The iron ore price collapse is also hitting nominal income growth which also constrains wages growth.

While promising the budget would contain a “credible path back to surplus”, Mr Hockey again declined to nominate when a surplus could eventuate…

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.