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Hedge Clippings | 28 March 2025 All of a sudden, the phoney war is over and the real campaign has begun. Tuesday night's 2025-26 Federal Budget has been handed down, and as expected it turned into a classic pre-election cash splash. Prime Minister Anthony Albanese then made the trip to Government House first thing this morning to call the federal election for 3 May - a five-week sprint to polling day, punctuated by the Easter and Anzac Day break. While Treasurer Jim Chalmers insists his budget is about "building a better future," it's widely seen as a blatant vote-buying exercise, stuffed to the gills with cost-of-living sweeteners. After running two rare budget surpluses, Chalmers has now opened the purse strings: the deficit is expected to hit $27.6 billion this year and $42.1 billion next year. Fiscal purists may wince, but most punters will shrug - those are just mind-boggling numbers on paper, far removed from the average voter's hip pocket. And hip pockets, of course, are exactly where this budget aimed. Sure enough, Tuesday's budget rolled out a Santa's sack of energy rebates, rent assistance, cheaper GP visits and PBS medicines. In other words, the usual household budget pleasers. A last-minute surprise - $17 billion in income tax cuts - gave Labor a rare chance to campaign on tax relief and left the Coalition looking awkwardly flat-footed. Cue Peter Dutton's budget reply, which promised to outbid Labor with a halving of the fuel excise and a vow to repeal those very tax cuts. A strange role reversal for the Liberal Party, but we are in pre-election auction season, where handouts come first and policy coherence later - if ever. Talk of real reform (say, fixing the tax system) didn't even get a look in. Meanwhile, speculation is growing that Albanese may not remain Labor leader for long. Dutton didn't miss the chance to stir the pot, suggesting Jim Chalmers is circling. The Treasurer, who's been on a media blitz since Budget night, certainly isn't shying away from the spotlight. Whether he's positioning himself for a leadership change or just basking in the glow of a very political budget, the message is clear: he's ready, just in case. Markets, for their part, aren't overly fussed. Pre-election budgets tend to play well with voters but don't rattle investors - especially when both sides are throwing money around and avoiding anything too radical. Inflation could get a nudge, but the RBA likely stays on the sidelines for now. In short: more of the same. If all of this seems a bit familiar, that's because it is. Still, there's comfort in a local political drama that, for once, isn't dominated by overseas chaos. Enjoy it while it lasts - not only because next Tuesday is April Fools Day, but because Donald Trump is due to announce his next round of tariffs. News & Insights Manager Insights | Altor Capital on the Business of Sport The future of healthcare: Trump, policy and innovation | Magellan Asset Management Market Commentary | Glenmore Asset Management February 2025 Performance News Equitable Investors Dragonfly Fund Insync Global Quality Equity Fund Insync Global Capital Aware Fund DAFM Digital Income Fund (Digital Income Class) |
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