The New Budget Release Overview

The Budget was released tonight with lots of mixed reactions.

All round though is the negative reaction to the projected deficit of 57.6 billion.

This is an Australian record and statistics show this will not be paid off for over two generations!

The economy is projected to shrink by 0.5%. Although this does not seem like a lot it is still substantial with a long follow on effect for all industry sectors.

The lack of budget stimulus for growth in small business was disappointing for most with this industry sector known as the engine room to Australia’s economy.

Quick over view,

-   22 Billion on Infrastructure including roads, rail and ports.

-         2.5 Billion on hospitals

-         4.5 Billion on clean energy projects

Probably more importantly is the extension to the first homeowners grant for six months.  This will keep our current property prices bubbling along for now, however there is no more confidence in our markets with the new budget. There is still no signal for significant growth in property prices in the short term with confidence still low.

The unemployment rate is projected to reach 8.5%. History show rates below approximately 7.7% do not affect the property market.  Even at 8.5% it is still worth remembering there will be 91.5% with jobs.

With low interest rates, more tax cuts coming, anyone with a secure job and low debt would be in a good position to move forward, with investments and property in general.