Several economists have joined Alex Erskine in suggesting that the budget applies upward pressure on interest rates – notably the ANZ’s Saul Eslake, who writes in both the Finand The Ozon the budget.

The opposing view is that small changes in a budget surplus have a small effect on the economy. Henry’s take is that it all depends on whether or not recipients spend or save their tax cuts. I liked Bill Shorten’s suggestion that the Newcastle steel workers should save it as the new IR laws would cut their base pay. Double whammy on reform if it happens.

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