ABC News Daily Will Trump ruin Labor’s economic plan?
May 5, 2025
Ian Verrender, ABC's Chief Business Correspondent, discusses the Labor Party's ambitious economic plans following their recent victory. He highlights the challenges of inflation, rising wages, and expected interest rate cuts. Verrender also explores how external factors, particularly Trump's policies, could disrupt Labor's strategies. Additionally, he examines the importance of maintaining trade ties with China and the balance needed to navigate domestic fiscal challenges while ensuring economic stability.
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Election Focused on Cost of Living
- The recent election was dominated by the cost of living crisis due to inflation spikes.
- Voters expect the new Labor government to ease financial burdens in the coming years.
Inflation and Wages Improving
- Inflation has dropped into the Reserve Bank's comfort zone between 2% and 3%.
- Wages are growing faster than inflation and interest rates have started to fall.
Tax Cuts Target Low Income
- The new tax relief targets the lowest tax band, reducing it from 15% to 14%.
- This gives low wage earners a small but meaningful benefit in their paychecks.