The Federal Government is expected to have the lowest budget deficit in over a decade in the 2018-19 fiscal year, thanks to a surge in commodity prices, mining profits and tax revenue.
Treasurer Josh Frydenberg said on Monday that the government is expecting a $4.1 billion surplus in 2019-20, up from the $2.2 billion predicted in May budget. The forecasted deficit for this year has also been lowered from $14.5 billion to $5.2 billion.
“Our economic fundamentals are strong with the unemployment rate down to five percent, economic growth faster than all G7 nations except the United States and our AAA credit rating reaffirmed,” said Frydenberg in a statement.
“The combination of a growing economy with a record number of people in work is helping both sides of the ledger — increasing our revenues, while also decreasing our expenditure.”
The Mid-Year Economic and Fiscal Outlook (MYEFO) expected the underlying cash surplus to reach $30.4 billion over the next four years, almost double the 2018-19 Budget estimate.
Global trade tensions remain a risk for Australia in the coming years. The MYEFO said, “The extent to which trade protection measures have contributed to a slowdown in global trade growth in 2018 is unclear. However, trade tensions remain a risk to the global outlook, notwithstanding the recent pause in tariff increases agreed by the United States and China.”