Economists had thought a surplus was attainable in the current fiscal year, but the government is still projecting a deficit of A$14.5 billion. — Reuters photo
SYDNEY: A surging tax-take has blessed Australia’s centre-right government with the smallest budget deficit in a decade and the means to fund a host of voter friendly spending promises as it struggles in the polls.
The Liberal National Coalition led by Prime Minister Scott Morrison has to face the nation by May next year and trails badly after dumping former leader Malcolm Turnbull in a bout of internecine party warfare a month ago.
Swelling coffers offer the chance to throw money at some long-standing political problems, such as a A$4.6 billion (US$3.33 billion) injection into Catholic and private schools announced just last week.
Addressing a news conference on Tuesday Treasurer Josh Frydenberg said a combination of higher tax receipts and restrained welfare spending had shrunk the budget shortfall to A$10.1 billion in the year to end June.
That was down from a projection of A$18.1 billion made as recently as May and, at 0.6 percent of gross domestic product (GDP), the smallest since the global financial crisis.
The swing owed much to record-high company profits, which helped boost tax receipts by A$13.4 billion, while faster growth in the economy and jobs restrained welfare payments.
Despite the marked improvement the government stuck with its forecast that the budget would not return to surplus until 2019/20, with Frydenberg dodging question on why it would not happen sooner.
“We absolutely continue to have a very disciplined approach when it comes to our Budget management,” he told reporters. — Reuters