Such sluggish growth would push up the nation's jobless rate and in turn remove upward pressure on wages that have failed to grow in line with budget expectations for the past six years. Loading The IMF also sliced its forecasts for most of the developed world, citing the ongoing trade war between the United States and China, the troubled efforts of Britain to leave the EU as well as poor economic performance out of Italy and Germany. Rating agency S&P, in a report into risks facing Australian businesses, said the lack of wages growth was behind the rise of "thrifty consumers" who were looking for ways to reduce their spending. Describing consumer sentiment as "listless", the agency said household consumption was likely to edge down because people simply did not have extra money to spend while the fall in house prices was encouraging people to lift their saving levels.

Loading "We believe that a rise in the household savings rate poses the greatest near-term risk to Australian corporates," they said. "Households are under pressure from stagnant wage growth, rising costs of living and falling wealth." That wealth is tied up in housing with fellow rating's agency Moody's dramatically slicing its predictions for the national property market. In January, Moody's forecast Sydney house prices would drop by 3.3 per cent through 2019. It now believes the drop will be 9.3 per cent.

Melbourne's drop-off is even more acute, with the agency now predicting an 11.4 per cent fall in the city's house prices. In January, it was tipping a 6 per cent decline. Loading Key parts of both cities are likely to suffer even bigger falls. Sydney's inner south-west is tipped to endure falls of 14.4 per cent while in Ryde prices are forecast to drop by a city-worst 15.8 per cent. That would be after falls last year of 8.1 per cent and 11.3 per cent respectively. Every part of Sydney is expected to see a fall in house values with the best performed likely to be the northern beaches (down by 4.3 per cent) and the Blacktown area (down 6.1 per cent).

Melbourne's market is facing a bigger downturn. The city's inner east is tipped to see falls of 16.3 per cent after a five per cent drop last year while across the inner south prices are forecast to edge down by 14.2 per cent after a 4.4 per cent decline in 2018. Like Sydney, no part of Melbourne is expected to be spared a sharp fall in prices this year. The "best" performed parts of Melbourne are tipped to be the city's north-east and west with falls of 8.5 per cent. Shadow treasurer Chris Bowen will use a speech on Wednesday to argue key elements of the budget are "dodgy" and put at risk the government's tax cut plans. Credit:Dominic Lorrimer Shadow treasurer Chris Bowen, who on Wednesday will deliver his reply to Josh Frydenberg's budget speech, will argue that if Labor wins the election it will promise larger surpluses than forecast by the Coalition despite slower economic growth, wages and household consumption.