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Australia government promises 'back in black' budget in election run-up

Credit: Reuters Studio
Published 3 weeks ago - Duration: 01:56s

Australia government promises 'back in black' budget in election run-up

Australia’s conservative government has proposed a massive set of tax cuts and record spending on health and education as it shapes its pitch for votes in an imminent election.

As David Pollard reports, the announcement came on the same day as the latest policy decision from Australia's central bank.

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Australia government promises 'back in black' budget in election run-up

Twenty-seven years and counting, Australia's unbroken run of growth has been envied the world over.

Even so, the RBA kept rates on hold on Tuesday.

Recent data has disappointed - the central bank also dropped a 3 per cent growth forecast for this year.

The government, meanwhile, was announcing its own budgetary measures to keep the economy on track.

(SOUNDBITE) (English) AUSTRALIAN TREASURER JOSH FRYDENBERG SAYING: "So tonight I am pleased to announce a budget surplus of $7.1 billion." A surplus that allows, it says, a pledge of 158 billion Aussie dollars of proposed tax cuts over the next decade.

That's 112 billion US dollars - mostly for middle-income earners - and on top of a similarly sized pledge last year.

Prime minister Scott Morrison's conservative coalition is expected to suffer a wounding defeat in an election in May.

What one analyst described as an "extraordinarily generous" giveaway to voters, an attempt to rewrite that narrative .... If with a nod to external challenges too.

(SOUNDBITE) (English) AUSTRALIAN TREASURER JOSH FRYDENBERG SAYING: "Businesses are also benefiting from the free-trade agreements this government has secured.

China, Japan, Korea, the Trans-Pacific Partnership and now Indonesia.

Tonight we provide an additional $60 million for export market development grants to allow small and medium-size businesses to capitalise on these opportunities." Even with record spending on health and education, the government says the budget will show a surplus - for the first time in 12 years.

But - its forecasts also downgrade growth .... And as for the Aussie dollar: the RBA's decision shaved off half a per cent on Tuesday.

Rates have been stuck at 1.5 percent since mid-2016.

Some even see a shift to an easing bias when it next meets - also in May.

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