A leading Australian economist says more focus needs to be put on productivity to pull Australia out of a deficit. 

The federal Budget announced yesterday included tax cuts and cost of living relief for households. 

HSBC Chief Economist Paul Bloxham told Mike Hosking with big spending measures announced in the lead up to the election, deficits to the tens of billions are forecast for years to come. 

He says the best way to change that is to boost Australia's slumped productivity, which is at the same level as it was in 2016. 

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