Federal Budget – What it means for the advertising industry
Credit: Jamie Albright via Unsplash
The federal budget will help keep spending high in some retail sectors, supporting the current increase in advertising spending.
This is underpinned by increased direct financial support to offset the rising cost of living and a reduction in excise duty on fuel to 22.1 cents per liter from 44.2 cents.
Mark Thirlwell, Chief Economist, Australian Institute of Company Directors: “The budget forecast forecasts a relatively optimistic outlook for the Australian economy, predicting “a sustained period of strong economic growth, low unemployment and rising wages”.
“a “cost of living package” that includes a $420 low- and middle-income tax offset that will be paid in addition to the low- and middle-income tax offset (LMITO).
“There is also a cost of living payment of $250 for eligible retirees and welfare recipients.”
Media analyst Steve Allen, director of strategy and research at Pearman, says the budget is largely trying to maintain consumer confidence and spending.
“As we all know by now (with much recent analysis and commentary), in the current difficult economic outlook conditions, preparing the economy for emerging, and more to come, shocks to the cost of living is an exercise in delicate balance, too much priming of the economy and it fuels inflation, and it exacerbates costs/cost of living….like a dog chasing its tail!
“The budget tabled is unmistakably political, more so than most, as it is about six weeks away from the federal election. So much of what is in the budget may never be implemented, although Labor so far has generally said it backs and approves of most consumer-led measures.
What’s in it for media and marketing?
Allen: “The biggest and most important theme is to keep the economy at the current pace fairly strong. The nearly $230 billion in household savings largely accumulated over the two years of COVID are being released and spent (much more to be released gradually), this was largely before additional economic and supply chain shocks resulting from the Ukraine/Russia conflict.
“We know that we are at the bottom of the interest rate cycle, both here and globally. Inflation is accelerating, and although in Australia this will be a much lower number than elsewhere in the world (it is currently almost half of what other western democracies are already showing), these are all financial factors that could squeeze consumer spending and drain on confidence.
“So the bottom line is that the economy should continue to run without major shocks or corrections. So the current conditions for media marketing will persist. That’s good for our customers and, therefore, good for us.
Mitchell Crowe-Hardy, Chief Strategy Officer, Ogilvy Melbourne: “The resounding message the government has sent to Australians is one of support and reassurance.
“For the difficulties that COVID-19 has created (and which is expected to cause later this year) and the impending ‘normalization’ of monetary policy with interest rate hikes. Doing so with an outward and overt message” help families with the cost of living”.
“Something that is clearly represented by the five-year significant investment in mental health, the average income tax offset, the short-term gas tax cut, the extension of paid parental leave and reducing barriers to first home buying. digital skills training for staff.
“The federal government clearly intends to instil a sense of confidence and optimism.
“As we begin to rebuild such trust, the first example of major government-backed marketing has been reported in the tourism sector.
“A $63 million marketing initiative to revive international tourism, signaling a significant focus on the marketing sector as it accounts for half of the total budget for all tourism-related activities over the same period.”
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