A new exclusive report published in Australian newspapers The Age and The Sydney Morning Herald shows that the Australian economy is tipped to grow slower than Greece’s, as signs show tax cuts haven’t worked.
In the article published today, it is noted that the International Monetary Fund has revealed a sharply downgraded forecast for the Australian economy for this year and next, “as evidence mounts Morrison government’s personal income tax cuts are not being spent by cautious consumers who are trying to get on top of their mortgages.”
The article also highlights that the IMF believes the Australian economy will grow by just 1.7 percent this year, making it weaker than the economy of Greece, which “has gone through several years of depression.”
Twelve months ago, the fund tipped Australia to expand by 2.8 percent through 2019. According to the report, it is part of a broader slowdown, with the global economy now expected to grow by 3 percent, its worst performance since the global financial crisis of 2008-09.
The Reserve Bank of Australia noted that consumers continue to be “squeezed by low wages growth and an increase in total taxation, although it conceded recent interest rate cuts may have hit shopper confidence.”
The report states that separate research from ratings agency Standard & Poor’s suggests consumers, rather than spend their income tax cuts, are using the cash to get on top of their mortgages. Its measure of prime mortgages also showed a drop in the number of people behind on their repayments in August, with the biggest fall amongst those 30 to 60 days in arrears.