Global Courant 2023-05-09 10:53:17
Treasurer Jim Chalmers says the country is on track for its first surplus since the 2008 global financial crisis.
The Australian government has forecast the country’s first balanced annual budget in 15 years, but has warned that economic pressures, such as inflation, would push the country into greater debt in years to come.
Treasurer Jim Chalmers announced Tuesday that a surplus had been forecast for the fiscal year ending June 30 ahead of the release of the government’s economic blueprint for next year, which aims to ease the financial hardships of the most deprived without fueling stubbornly high inflation.
High prices for commodities including iron ore, coal and gas plus income tax revenues, supported by an extraordinarily low unemployment rate of 3.5 percent, are expected to produce the first surplus since the global financial crisis sent the Australian economy into the red in 2008.
“We are now forecasting a surplus this year, smaller deficits after that and less debt across the budget,” Chalmers told reporters. Australian annual budgets typically include projections for the next four years.
Chalmers did not say how big the surplus would be, but several media outlets are reporting that a surplus of 4 billion Australian dollars ($2.7 billion) is expected.
An interim budget forecast released by the government in October last year projected a deficit of AUD 36.9 billion ($25 billion) this year. That was less than half of the 78 billion Australian dollars ($53 billion) forecast by the previous government in March last year.
In October, Australia’s gross debt as a percentage of gross domestic product (GDP) was forecast to reach 37.3 per cent, or 927 billion Australian dollars ($628 billion), by the end of the current fiscal year and will continue to rise over the decade. continue to rise.
The government has already announced that next year’s budget, which will be detailed later on Tuesday, will include Australian $14.6 billion ($9.9 billion) in measures to help low- and middle-income earners cope with the inflation expected in the year. through March slowed to 7 percent from a peak of 7.8 percent in December.
Australia’s central bank says inflation remains too high and raised benchmark interest rates by a quarter of a percentage point to 3.85 percent last week. It was the 11th increase since May last year, when cash rates hit a record low of 0.1 percent.
Chalmers said government spending in his latest budget was designed to prevent inflation.
“This is a responsible budget that helps people who are struggling and sets Australia up for the future,” Chalmers said.
“It has been carefully calibrated to address cost-of-living pressures in our communities, rather than adding to them,” he added.
The budget will include the initial costs of the so-called AUKUS agreement with the United States and the United Kingdom that will provide Australia with a fleet of eight submarines powered by US nuclear technology.
The fleet, announced in March, is expected to cost Australia between AUD 268 billion ($182 billion) and AUD 368 billion ($249 billion) by the mid-2050s.
Chalmers said it will become more difficult to achieve budget surpluses from next year as economic pressures are expected to intensify.
