By James Glynn
SYDNEY–Australian Treasurer Jim Chalmers confirmed Wednesday the government’s forecast budget surplus in the year to June 30, the first in 15 years, will be much bigger than that predicted in May.
“I’m pleased to say that two days out from the end of the financial year, we’re still on track. In fact, we’re in a significantly better position than we forecast,” Chalmers said in a speech to a property forum in Darwin.
“I can reveal that we’re expecting the surplus will be bigger than forecast in May,” he added.
The government forecast in May a surplus of 4.2 billion Australian dollars ($2.81 billion) in the year to June 30, the first since 2008.
With unemployment at close to a 50-year low, and commodity prices elevated, the revenue side of the budget has been strong.
Still, pressure is expected to remain on the budget’s bottom line over time with spending expected to grow in areas such as health and defense, while higher interest rates will also put a brake on economic growth.
The government expects GDP growth to slow from 3.25% in calendar 2023 to around 1.5% in 2024.
Still, many economists have recently ramped up their estimates for the probability of a coming recession as the Reserve Bank of Australia has indicated it will likely continue to raise interest rates.
Delivering a bigger budget surplus will help the government rebuild buffers that will be needed if the economy slows sharply, and “take heat out of the economy just as it’s needed to combat inflation,” Chalmers added.
Write to James Glynn at [email protected]
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