Earn
Forecast budget surplus cut by $2bn
Treasurer Josh Frydenberg’s forecast budget surplus has been cut by more than $2 billion this financial year as revenue is predicted to fall by $32.6 billion over the next four years.
Forecast budget surplus cut by $2bn
Treasurer Josh Frydenberg’s forecast budget surplus has been cut by more than $2 billion this financial year as revenue is predicted to fall by $32.6 billion over the next four years.
The government’s announcement comes as part of it’s mid-year economic and fiscal outlook (MYEFO) report, which showed that the Australian economy is expected to have a surplus of $5 billion in 2019-20 or 0.3 per cent of GDP.
Over the next four years, the surplus is expected to be $23.5 billion.
The mid-year budget update revealed growth forecast for wages, which has been slashed from 3.25 per cent to 2.5 per cent.
The Reserve Bank of Australia previously noted that lower wage growth will become the new norm in the Australian economy.
Treasurer Josh Frydenberg said the downward revisions is mainly due to lowering of taxes to individuals, company taxes and the GST.
Net debt is projected to be $392.3 billion in 2019-20 (19.5 per cent of GDP) and to improve across the forward estimates and medium term. Gross debt as a share of GDP is also expected to decline over the forward estimates and medium term.
Finance Minister Mathias Cormann put a positive spin on today’s announcement, highlighting Australia’s position compared with relative G7 nations.
“The outlook for the Australian economy is positive. GDP growth in the first three quarters of 2019 has been stronger than it was in the second half of 2018, with MYEFO confirming that the economy is forecast to grow by 2 1/4 per cent in 2019-20. Growth is forecast to improve to 2 3/4 per cent in 2020-21, which is faster than any G7 nation and well above the OECD average of 1.6 per cent.”
The minister also highlighted the strength of the labour market, noting that welfare dependency dropped to its lowest level in 30 years, “which is helping to keep real growth in spending to the lowest of any government in 50 years”.
The report noted that global economic momentum has weakened due to the US-China trade war, Brexit and factors in South America and East Asia.
“Global growth is expected to be 3 per cent in 2019 – the weakest growth since the global financial crisis – and 3 1/4 per cent in 2020. Major trading partner growth is forecast to be 3 1/2 per cent in 2019 and 3 3/4 per cent in 2020,” the reported noted.
With a weakening global economy, the assumption for commodity prices has fallen, which is having an impact on the Australian economy.
To help the Australian economy, Mr Frydenberg has pledged to spend more on infrastructure, communities and quality and safety in aged care.
“The total transport infrastructure investment will be over $100 billion over 10 years, including an additional $4.2 billion over the next four years.”
“The government is also redirecting $200 million from the Building Better Regions Fund into drought-affected communities and funding an extra $138.9 million in Roads to Recovery in 2020 for 128 local government areas impacted by drought.”
“The government will provide $624 million to respond to the interim report of the royal commission and to build on recent improvements to standards, oversight, funding and transparency in the care of older Australians,” Mr Fydenberg concluded.
RELATED ARTICLES
About the author
About the author
Salary
Labour market momentum continues as older Australians see wage growth
Australia's labour market is showing signs of sustained momentum, with a notable increase in hours worked alongside job growth, according to Ben Thompson, CEO and co-founder of Employment HeroRead more
Salary
Wage growth in SMB sector outpaces official figures, reveals Employment Hero
In a surprising revelation that challenges official statistics, the latest data from Employment Hero has highlighted a significant wage growth in Australia's small and medium business (SMB) sectorRead more
Salary
Big businesses under scrutiny for slow payments to small suppliers as new data surfaces
New data from the Payment Times Reporting Regulator (PTRR) has revealed that large businesses continue to delay payments to small suppliers, despite the growing economic pressures. The PTRR has ...Read more
Salary
GoCardless calls for stronger small business support following rejection of Payday Super extension
GoCardless has urged the federal government to increase support for small businesses after the House of Representatives voted against a proposed amendment to the Payday Super legislation that would ...Read more
Salary
The financial benefits of a diversified income stream
In today’s volatile economic environment, relying solely on a single source of income can be risky. Diversifying your income streams can provide financial stability, reduce the risk of financial ...Read more
Salary
Despite losing top spot, Elon Musk rakes in $400,000 hourly
Elon Musk, the entrepreneur known for his involvement in a wide range of innovative and technological businesses, has recently been dethroned as the wealthiest individual in the world, with Bernard ...Read more
Salary
Rising unemployment and skill shortages prompt Australian businesses to look globally for talent
Australia has witnessed its unemployment rate surging above 4% for the first time in two years, revealed by the latest Labour Force data. Read more
Salary
New findings link job mobility hurdles to stagnant wage growth
Recent research from the e61 Institute has unearthed significant links between slow wage growth in Australia and obstacles to job mobility, including non-compete clauses, complicated occupational ...Read more
Salary
Labour market momentum continues as older Australians see wage growth
Australia's labour market is showing signs of sustained momentum, with a notable increase in hours worked alongside job growth, according to Ben Thompson, CEO and co-founder of Employment HeroRead more
Salary
Wage growth in SMB sector outpaces official figures, reveals Employment Hero
In a surprising revelation that challenges official statistics, the latest data from Employment Hero has highlighted a significant wage growth in Australia's small and medium business (SMB) sectorRead more
Salary
Big businesses under scrutiny for slow payments to small suppliers as new data surfaces
New data from the Payment Times Reporting Regulator (PTRR) has revealed that large businesses continue to delay payments to small suppliers, despite the growing economic pressures. The PTRR has ...Read more
Salary
GoCardless calls for stronger small business support following rejection of Payday Super extension
GoCardless has urged the federal government to increase support for small businesses after the House of Representatives voted against a proposed amendment to the Payday Super legislation that would ...Read more
Salary
The financial benefits of a diversified income stream
In today’s volatile economic environment, relying solely on a single source of income can be risky. Diversifying your income streams can provide financial stability, reduce the risk of financial ...Read more
Salary
Despite losing top spot, Elon Musk rakes in $400,000 hourly
Elon Musk, the entrepreneur known for his involvement in a wide range of innovative and technological businesses, has recently been dethroned as the wealthiest individual in the world, with Bernard ...Read more
Salary
Rising unemployment and skill shortages prompt Australian businesses to look globally for talent
Australia has witnessed its unemployment rate surging above 4% for the first time in two years, revealed by the latest Labour Force data. Read more
Salary
New findings link job mobility hurdles to stagnant wage growth
Recent research from the e61 Institute has unearthed significant links between slow wage growth in Australia and obstacles to job mobility, including non-compete clauses, complicated occupational ...Read more
