Australia’s budget is expected to be in surplus in 2019-20, and Tasmania benefits with a bigger bite of GST.
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Federal Treasurer Josh Frydenberg and Finance and Public Service Minister Mathias Cormann announced their Mid-Year Economic and Fiscal Outlook on Monday, highlighting the upcoming surplus.
The country’s underlying cash balance is forecast to improve from a $14.5 billion deficit to a $5.2 billion deficit in 2018-19.
The budget is expected to reach a surplus of $4.1 billion in 2019‑20.
Acting Tasmanian Treasurer Jeremy Rockliff welcomed the strong results reported in the outlook, saying they supported steady growth in the national economy.
“In fact the MYEFO results mirror what we are seeing here in Tasmania, confirming that good budget management and financial discipline are helping to boost confidence in the economy, meaning that consumers are prepared to spend and businesses are able to invest and hire more staff,” Mr Rockliff said.
The outlook confirmed that overall national revenues were broadly on track, he said.
“Tasmania’s forecast growth in population is set to see the state receive a greater share of the GST pool, despite a small reduction in the national pool.”
Treasury is analysing the outlook figures before including them in the state’s Revised Estimates Report early next year.
“We will continue to push for the best possible outcomes for Tasmanians in terms of future Commonwealth funding to support government services,” Mr Rockliff said.
Cumulative estimated federal budget surpluses have been forecast to be $12.5 billion in 2020-21 and $19.0 billion in 2021-22, Mr Frydenberg and Mr Cormann said.
“The combination of a growing economy, with a record number of people in work, is helping to increase revenues while decreasing expenditure,” they said.
“This means expected total receipts have been revised up by $8.3 billion in 2018‑19 and $12.4 billion over the four years to 2021‑22.”
New federal spending has been offset by reduced spending elsewhere and the payments‑to‑GDP ratio is falling to 24.6 per cent by 2020‑21.
The rate of real spending growth is averaging 1.9 per cent, which is the lowest level of any government in 50 years, Mr Frydenberg and Mr Cormann said.
“Net debt is expected to decline in each year of the forward estimates and medium term, falling from 18.2 per cent of GDP in 2018‑19 to 1.5 per cent in 2028‑29.”
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