The key to repairing the budget is to repair the economy. We are not out of this pandemic yet. You have seen events in India and the lockdown in Western Australia, the virus is having new strains and so we’ve got to be very cautious and very considerate and try to drive that unemployment rate down…
Until you get the unemployment rate down to around 4.5% to 5% you won’t get an acceleration in inflation and unemployment.
So Treasury have actually redone their economic modelling and forecasting around that number. With respect to our priority, it is to drive the unemployment rate down in the first instance to where it was pre-pandemic, which was 5.1% last February.
The economy, the labour market has been a lot more resilient than we expected in our most optimistic forecasts but there is still a lot of uncertainty out there and that is why the budget will keep the focus on skills, on infrastructure, on tax and of course on ensuring we guarantee those essential services like aged care.
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