The Albanese government’s economic policies have “failed the country”, a leading economist has declared ahead of Tuesday’s Federal Budget.
Managing Director of EQ Economics Warren Hogan said he wanted to see the Albanese government “recognise” the real effect on the economy of its overspending in the budget.
Speaking to Sky News on Sunday, ahead of the release of Tuesday’s budget, Mr Hogan said there was “evidence” to show the public service and government spending was “growing much faster” than the economy could.
“I want to see the government recognise that their strategies and economic policies have failed the country. And we’ve got evidence of that now,” he said.
“They’re squeezing out the private sector. They have got to bring this explosive growth in federal government, recurrent spending, permanent spending under control,” he said.
“And so I would like to see them start the journey now, because we need it now with this inflation. A plan to get government, size of government down in a responsible and staged way over the next decade.”
Asked what the chance was of seeing this admission from Treasurer Jim Chalmers on Tuesday, Mr Hogan said, “zero”.
It comes as the Albanese government is set to make the shock call to immediately axe negative gearing for new property investors in a major broken election promise.
Under the plan, negative gearing will be restricted to newly built homes and will be grandfathered for current investors already holding negatively geared assets.
The change will come into effect in July 2027, but will apply to existing properties as of Wednesday.
Leading funds manager Geoff Wilson said the government’s negative gearing and capital gains tax changes would “pull up the ladder” on younger people who would not be able to access the tax discounts.
On Monday, Prime Minister Anthony Albanese said good governments made “the right decisions for the right reasons” ahead of budget night.
“People are under pressure and the easy path is to say, ‘oh well, we’ll just sit back and watch that occur’. The difficult decision, but the right decision, is to do the right thing with the right policies to deliver,” Mr Albanese told ABC Radio National.
“People are frustrated with issues like intergenerational equity. People are worried that younger Australians are never going to get a crack at home ownership … Any responsible government like ours has to take these issues seriously.
“The circumstances that are here now when it comes to intergenerational equity, how are they different from what they were before the last election. How they are different is that they continue to be entrenched without reform and that’s the point.”