Budget Preview: Disappointing as well as “dull”

While Tuesday’s Federal Budget may well live up to the “dull” label slapped on it by the Prime Minister, the failure to provide any extra support to the economy will be disappointing. This would place an even greater burden on the Reserve Bank of Australia (RBA) to cut interest rates further. What’s more, we think the cash deficit will remain further away from balance for longer than the Treasury expects, which would put more downward pressure on the Australian dollar.