Australia’s budget is projected to return to surplus in 2022-23 for the first time in 15 years amid high commodity prices and a record low unemployment, and then to post smaller deficits and lower debt across the forward years, Treasurer Jim Chalmers said in his budget statement on Tuesday.
The surplus for the fiscal year ending June 2023 is projected at A$4.2 billion. For 2023-24, the underlying cash deficit is expected to be A$13.9 billion.
Gross debt is seen at 35.8 percent of GDP in 2023-24. The government forecast gross debt to peak at a lower level and five years sooner than forecast in the October Budget.
“This Budget delivers targeted cost-of-living relief that will directly reduce price pressures in 2023-24, makes investments in a stronger economy, and makes room for critical programs and services that were left unfunded by the previous government,” Chalmers said.
Economic growth is expected to slow to 1.5 percent in 2023-24, before recovering in 2024-25. More jobs are being created and the unemployment rate is expected to stay low by historical standards, Chalmers noted.
Inflation is forecast to return to the target in 2024-25. The treasurer said the targeted cost-of-living measures will directly reduce price pressures and the CPI by 0.75 of a percentage point in 2023-24.
Wage growth is set to build to 4 percent in 2023-24, the fastest since 2009, Chalmers added.
The budget included measures to reduce the cost-of-living and to strengthen the country’s healthcare system Medicare.
The treasurer also announced an energy bill relief to 5 million households and 1 million small businesses. This is expected to help 170,000 households save on energy bills by financing energy-saving home upgrades.
The Labor government plans to invest A$5.7 billion over five years from 2022-23 to strengthen Medicare and make it cheaper and easier to see a doctor, Chalmers said.
The budget also raised the base rate for the jobless benefit payment called JobSeeker and other payments for 1.1 million people. The government also unveiled tax breaks to ensure more investment in build-to-rent projects.
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