While markets will applaud the improved bottom line in Thursday’s budget update, all political eyes will be on two sets of numbers – inflation and wages.
Both sides of politics agree that the cost of living will be a decisive issue at the coming election. If the government forecasts wages to barely keep pace with inflation over the next four years, it will officially admit it expects living standards to remain stagnant under its stewardship.
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Craig Emerson is managing director of Emerson Economics. He is a distinguished fellow at the ANU, director of the Australian APEC Study Centre at RMIT and adjunct professor at Victoria University’s College of Business.
