PolicyEconomyAustralian economyOpinionTax shock will help Reserve Bank slow economy – accidentallyThe disruption from the government’s budget changes may inadvertently help the RBA slow economic actibity and cool inflation in the coming months.John KehoeEconomics editorThe Albanese government’s tax changes in the federal budget may inadvertently help the Reserve Bank of Australia slow the economy and cool inflation.This is being discussed inside the RBA ahead of its monetary policy board meeting next week, as first reported by Nine’s newspapers and independently sourced by The Australian Financial Review.Subscribe to gift this articleGift 5 articles to anyone you choose each month when you subscribe.Subscribe nowAlready a subscriber? Latest In EconomyFetching latest articlesMost Viewed In Policy
Tax shock will help Reserve Bank slow economy – accidentally
The disruption from the government’s budget changes may inadvertently help the RBA slow economic activity and cool inflation in the coming months.
TL;DRAI
Australia's budget tax changes inadvertently support the Reserve Bank's inflation-cooling efforts by dampening economic activity. Fiscal drag reduces RBA pressure to raise rates further, easing borrowing constraints for businesses and improving capex planning.
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