The RBA was right to keep rates on hold at 1 percent today and leave any further cuts till later in the year.

We forecast domestic annual GDP growth will rise to 1.9 percent in the second half of 2019 after bottoming out at 1.4 percent growth for the year ended 30 June 201

The key here is that Newstart recipients are amongst the poorest people in society – so they spend, rather than save, almost all they receive, putting money back into the economy.

The immediate tax relief of stage one will put money in the hands of those who will spend.

By cutting rates, the RBA is sending a signal to the market, to politicians and to the community at large, that the Australian economy is not firing on all cylinders

The sluggish GDP figures, particularly the weakness in household consumption, shows the RBA would have been justified in cutting cash rates faster.

It seems inevitable the Reserve Bank of Australia will drop the cash rate in its meeting next week, and possibly again later in the year.

So, the Reserve Bank of Australia resisted growing calls to cut interest rates yesterday. They were right to do so.

The economic forecasts for real GDP and real wages contained with the Budget – especially in the out years – seem reliant on Australia lifting its relatively lax productivity performance.