October is here and it’s shaping up to be a busy month. Many of us are taking advantage of the October long weekend and school holidays for a much-needed staycation in our home states, while Melbourne has announced a further easing of restrictions. Next week, all eyes will be on Tuesday’s Federal Budget.
The scene is set for one of the most important Federal Budgets in living memory, after COVID-19 delayed the usual May delivery to October 6. In September it was confirmed that Australia is in recession. The economy contracted 7% in the June quarter following the 0.3% fall in the March quarter, taking the annual decline to 6.3%, the biggest since 1945. The pandemic has also hit the federal budget bottom line, with a budget deficit of $85.3 billion in the 2019/20 financial year. The biggest government stimulus program since WWII took net government debt to $491 billion, or 24.8% of GDP, with more spending on the cards.
Against this backdrop, there is mounting speculation that the Reserve Bank could cut the cash rate as early as next week, from its current record low of 0.25%, to help stimulate the economy. A rise in the Aussie dollar could tip the balance. The dollar ended September around US71.5c, down 2c over the month, after dipping as low as US70c.
We look forward to bringing you our special Budget Snapshot edition of Excel News next week. Interested to see how it evolves with this.
FARM UPDATE
Finally built our new fence along the road, only took 20 years! You no longer have to open the gate, you are safe from those cows!
