Slide in wages could risk tax cuts, surplus

Original article by Matthew Cranston
The Australian Financial Review – Page: 9 : 10-Dec-19

The Wage Price Index growth rate for 2019-20 is forecast to be 2.75 per cent, but wages increased by just 2.2 per cent in the September quarter. Westpac economist Bill Evans expects the federal government to downgrade its wage growth forecast in the mid-year budget update; he warns that this in turn may affect the size of the surplus and the Coalition’s ability to bring forward the second stage of its income tax cuts package. Evans notes that the price of iron ore is trading well above the government’s forecasts, which will help offset any revenue shortfall from slowing wages growth.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, DELOITTE ACCESS ECONOMICS PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, AUSTRALIA. DEPT OF FINANCE

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