Economists say that the government's tough budget could drive confidence to recession levels and delay future interest rate hikes until late next year.

Their assessment comes as the government prepares to issue $36 billion in new bonds to help get the economy back to surplus.

"This budget, which does contain a reasonably broad-based tightening of fiscal policy, can only mean that rates will stay lower for longer or when they do go up they will go up more gradually," said ANZ chief economist Warren Hogan.
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Mr Hogan said he will be closely watching consumer confidence levels over the coming weeks, given that they are dangerously close to recession levels.

The market is pricing in a 44 per cent chance of a rate hike by the Reserve Bank in the next 12 months.

Higher rates have an impact on borrowing costs and the interest rate associated with the paying back of new government debt, in that it will make it slightly more expensive.

On Tuesday night Treasurer Joe Hockey declared that it was time all Australians acted in the national interest and did their part by contributing to a better Australia with less debt

All this is happening because of Labor's debt, deficits and criminal economic mismanagement.

The children are now in opposition thankfully, and the adults are now in the process of fixing up the economic mess left by Labor.

Right is wrong....one side spends and the other side reaps it back.....the 101 of politics;)

Kat

one side spends and the other side reaps it back.
Origins of Man,
Not quite like that.
The ALP stole our money to give to itself & it's non-deserving, non-contributing hangers-on.
The LNP now has the unenviable task of making people live within their means, although it would have been much, much better if the present Government had knocked back the last salary increase as well.

Many Labour pollies having grown up with the union mentality that its ok to spend cleaners money on prostitutes and lavish living had no trouble splashing other peoples money around. Now its time to clean up the mess again. When are the voters ever going to wake up? Labour pollies taking their abc lovers on trips just before getting kicked out sums up the way they handle money. Some in the current Government are not much different however at least a few have had to work real jobs so know the value of a days work. Yep Labour get the spending going but only with other peoples money.

btw 579 by saying 'Economists say that the government's tough budget' u r talking about highly paid soothsayers. Almost none of them predicted the gfc or stock market crashes or housing booms or busts. They are like weather forecasters who are always wise after the event. They know about as much about the future as the gw alarmist know about future weather events. They guess, often get it wrong and then forget all their dud predictions in announcing the next forecast. The science on economics like weather is certainly not settled the bible makes the most accurate prophecies on both.