Prime Minister Scott Morrison’s government is on track to deliver a budget surplus. Picture: Kym SmithSource: News Corp Australia
Coalition on track to deliver budget surplus by 2019/20
The government has revealed a remarkable surge in the budget’s bottom line — but a mysterious $10.8 billion is getting all the attention.
DECEMBER 17, 2018
Australia’s budget will soon return to surplus for the first time in a decade, according to the government’s Mid-Year Economic and Fiscal Outlook.
This year’s budget predicted a deficit of $14.5 billion in 2018/19. That forecast has fallen to $5.2 billion.
And the government is now expecting a surplus of $4.1 billion in the 2019/20 financial year — to be followed by years of surpluses afterwards.
“Today’s MYEFO is a strong demonstration that the Liberal and National parties' government and their economic plan is working,” Treasurer Josh Frydenberg said at a press conference in Canberra this morning.
“This will be the first budget surplus since the last year of the Howard government.”
He also highlighted the unemployment rate, which is at a six-year low of 5 per cent.
“We have completed our 27th consecutive year of economic growth and the Australian economy is growing faster than the OECD average, and of all G7 nations except the United States,” he said.
“The strength of the Australian economy has been recognised by the International Monetary Fund, the OECD and our AAA credit rating has been reaffirmed.”
The unexpectedly good MYEFO figures — the deficit has shrunk by an extra $9 billion — are largely a result of tax revenue being higher than predicted.
It’s a timely windfall for the government as it prepares to fight the next election, probably in May.
The MYEFO papers show Scott Morrison has put $10.8 billion for “decisions taken but not yet announced”. A big chunk of that money could be used for tax cuts.
“We’re not going to make any announcements today. What we are saying is that we will approach all these issues in a carefully, considered, methodical way, just as we have done to date,” Mr Frydenberg said when he was asked about the mysterious $10.8 billion figure.
“It is no secret we are committed to lower taxes as part of our plan to strengthen the economy, create more jobs and ensure that Australians have the best possible opportunity to get ahead,” Finance Minister Mathias Cormann added.
“This only an update between now and the election there’ll be another budget, a pre-election economic and fiscal outlook, and of course decisions will be announced in the usual way
between now and the election.”
MYEFO also takes into account a $552.9 billion boost to aged care funding, which was announced on Sunday.
Labor has talked down the result, saying the government has “no plan” to properly manage the budget and economy.
“Of the $9 billion in unexpected improvements since the last budget, two thirds have been further increases in tax, and the government is collecting $100 billion more tax this year than in 2013,” Shadow Treasurer Chris Bowen said.
“Even with billions of dollars rolling through the door due to rosy global conditions, the Liberals have more than doubled net debt and gross debt has crashed through half-a-trillion dollars on their watch for the first time ever.
“The Liberals have shown after more than five years of chaos and disunity and division that they have no idea how to manage the budget and the economy in a fair and responsible way.”