The federal budget will help keep spending high in some retail sectors, supporting the current surge in ad spend.
This is underpinned by increased direct financial support to offset rising living costs and a cut to fuel excise to 22.1 cents per litre from 44.2 cents.
Mark Thirlwell, chief economist, Australian Institute of Company Directors: “The budget forecasts see a relatively rosy outlook for the Australian economy, predicting ‘a sustained period of strong economic growth, low unemployment, and rising wages growth.
"a ‘cost of living package’ which includes a $420 tax offset for low- and middle-income earners that will be paid in addition to the low and middle income tax offset (LMITO).
"There is also a $250 cost of living payment for eligible pensioners and welfare recipients."
Media analyst Steve Allen, Pearman's director of strategy and research, says the budget largely attempts to keep consumer confidence and spending continuing.
“As we all know now (with a lot of recent analysis and commentary), in present difficult economic outlook conditions, priming the economy for the shocks emerging, and more coming, to cost of living, is a delicate balancing act; too much priming of the economy and it feeds inflation, and that exacerbates costs/cost of living….like a dog chasing its tail!
“The budget handed down is unquestionably political, more so than most, as it is six or so weeks out from the federal election. Thus much of what is in the budget might never be implemented, though Labor, up until this point, has generally said, it supports and concurs with most of the Consumer directed measures.”
What is in it for Media and Marketing?
Allen: “The most important and overarching theme is keep the economy ticking at the present quite solid rate. The near $230 billion household savings largely accumulated through two years of COVID are being unlocked and spent, (lots more to be unlocked progressively) this was largely prior to the added economic and supply chain shocks flowing from the Ukraine/Russian conflict.
“We know we are at the bottom of the interest rate cycle both here and globally. Inflation is picking up, and whilst in Australia it will be a much lower number than elsewhere in the World (it is presently near half of what other Western democracies are already posting), these are all financial factors which could squeeze Consumer spending and flow on to confidence.
“Thus the bottom line is the economy should keep ticking without any major shocks nor corrections. Thus present media marketing conditions will persist. That is good for our clients and, as a result, good for us.
Mitchell Crowe-Hardy, strategy director, Ogilvy Melbourne: “The resounding message the government has sent to Australians is one of support and reassurance.
"For the difficulties COVID-19 has created (and predicted to cause later this year) and imminent 'normalisation' of monetary policy with interest rate rises. Doing so with an outward, overt message 'helping families with the cost of living'.
“Something that’s clearly represented through the significant five-year investment in mental health, middle income tax offset, short term petrol tax levy reduction, paid parental leave extension, and reduction in first home buyer barriers. When it comes to the media and marketing sector specifically, those who qualify as SME’s have been granted 20% tax deductions on tech upgrades and digital skills training for staff.
“There is a clear intent from the federal government to instil a sense of confidence and optimism.
“As we start to rebuild such confidence, the first instance of major government backed marketing has been signalled in the tourism sector.
“A $63 million marketing initiative to reignite international tourism, signalling a significant focus on the marketing sector as it accounts for half the total budget for all tourism related activity over that same period.”
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