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ASX to dip as Australia reacts to the 2020 Budget

Anastasia Santoreneos
·3-min read
Josh Frydenberg (left), man holding $100 notes (right)
ASX to dip as Australia reacts to the 2020 Budget. Source: Getty

Good morning.

Here’s Yahoo Finance’s Wednesday morning wrap.

The ASX is expected to dip at the open, with the SPI200 Futures Contract down 17 points to 5,932 indicating a tough start for the local bourse.

In the US, stocks were down more than 1 per cent after President Trump called off negotiations with Democratic lawmakers over coronavirus relief bills.

The Dow Jones Industrial Average fell 309.6 points, or 1.1 per cent, to 27,839.04, the S&P 500 lost 37.53 points, or 1.10 per cent, to 3,371.1 and the Nasdaq Composite dropped 139.42 points, or 1.23 per cent, to 11,193.06.

Missed the Budget last night? The Government handed down the nation’s most critical Federal Budget on Tuesday, with a clear focus on tax and investment.

Here’s what it means for you, and here are the clear winners and losers from the policy measures.

In short:

  • The stage two tax cuts have been brought forward, and will be backdated to 1 July this year;

  • A new wage subsidy has been introduced for 16-to 35-year-old unemployed Australians;

  • Pensioners and some welfare recipients will get two $250 cash injections between December and March;

  • A further 10,000 Aussies will have access to the First Home Loan Deposit Scheme for newly built homes;

  • Super funds will be forced to meet an annual performance test. If they fail, they have to tell their members and give them the option to move to a different fund.

Are you above 35 and unemployed? For the 928,000 above the age of 35 and jobless, the Budget, you’ve “been left out and left behind,” according to the shadow treasurer.

$1 trillion debt: Australia’s rising debt is ‘manageable’, according to Deloitte economists.

"Debt is up lots, but interest rates, what we pay on the debt, is massively down," Deloitte Access Economics economist Chris Richardson told ABC.

"Once we are on the other side of this health crisis you will be able to see the Australian economy grow very rapidly for some time.”

Big businesses cheer: Business groups have welcomed the new tax breaks, saying the Budget has incentivised the private sector to “reopen, grow and employ more people”.

But small business want more: Small business groups say they require ongoing rental assistance, and urge the Government to put employment services into local communities to help the jobless.

"There could be between 300,000 and 600,000 people who have never experienced being unemployed before - we need to let them know that there is support and it is ongoing," Council of Small Business chief Peter Strong said.

Have a great day.

With AAP.

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