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Transcript of Comm Sec Budget 2011
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The 2011 Federal BudgetTough or timid?
Budget setting
Main numbers
Major measures
Issue: China
Issue: Jobs
Issue: Interest rates Forecasts
Craig JamesChief Economist, CommSec, May 2011
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Impor tan t information
This resentation has been re ared without takin account of the
objectives, financial situation or needs of any particular individual.
Before acting on the information in this seminar, you should consider its
appropriateness to your circumstances and, if necessary, seek
appropriate professional advice.
Commonwealth Securities Limited ABN 60 067 254 399
AFSL 238814 (CommSec) is a wholly owned but non-guaranteed
subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124
and a Participant of the ASX Group.
Examples used in this presentation are for illustrative purposes only.
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Budget 2011
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Bud et settin
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Conservative consumers
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Main numbers
as ear2009/10
s ear2010/11
ex ear2011/12
n2012/13
Underl in bud et $ billion -$54.8 -$49.4 -$22.6 $3.5 Economic Growth (% change) 2.3 2.25 4.00 3.75Inflation (% change) 3.1 3.25 2.75 3.00
. . . .Unemployment (%, June quarter) 5.2 5.00 4.75 4.50
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Stimulus & slower growth
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Ma or measures
o s, o s, o s
Skilled migration Infrastructure spending
Savin s totallin 22
billion over five years
Assistance for those
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Winners & losers
Winners?
Job seekers
services
ppren ces
Small Business
Regional Australia
Losers
Salary sacrifice vehicle change
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Global ers ective
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Issue: Ascent of China
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China leads the waSo What?
Exchange rates, trade,
sharemarket, interest rates
Drivers of world economy -Contribution to growth 2011
China 0.81%
United States 0.74%
India 0.18%
Japan 0.14%
Newly Industrialised Asia* 0.13%
Germany 0.13%
ASEAN 5 # 0.12%
Brazil 0.11%
uss a 0.10%
United Kingdom 0.08%
France 0.07%
.
Other countries 1.70%
World 4.40%
Source: IMF & CommSec* Newly industrialised Asia Hong Kong, Taiwan, Singapore
and South Korea# ASEAN 5 Indonesia, Malaysia, Thailand, Philippines andVietnam
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Issue: Tight job market
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Job marketSo What?
Reasons to spend;
pressures for business
Job creation 2010
Total 368,600 3.3%
+ , .
25-34 139,200 5.7%
55-64 75,400 5.0%
45-54 56,400 2.3%
35-44 53,200 2.1%15-24 26,100 1.3%
Source: ABS & CommSec
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Issue: Interest rates
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Aussie dollar
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Summin u
g u ge or e mes
Discipline required to achievesurp us
Economy will lift later in 2011
Rate hikes remain on agenda
risks
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CommSec forecasts
Economic growth 2.40% in 2010/11 4.10% in 2011/12
. .
Unem lo ment 4.75-5.00% mid 2011 4.50-5.00% end 2011
Cash rate 4.75%, mid 2011 5.00-5.25%, end 2011
(Australian)
, , , ,
Australian dollar US108c in June 2011 US104c in December 2011
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