Fiscal policy and the public sector capex outlook

The Federal Budget bottom line is tracking much better than expected at the time of the March budget. Improvements in the underling economy suggest the Budget deficit in 2021/22 could come in approx. $A40bn lower than the most recent estimate of $A79.8bn. Stephen Halmarick, Chief Economist joins Belinda Allen, Senior Economist to discuss why we have seen such an improvement and why this will be important as the RBA tackles higher inflation by higher interest rates. Belinda also discusses the lift in the public sector capital expenditure pipeline but also how the headwinds of capacity constraints could see work delayed or cancelled.

 

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