The Australian Government has announced a forecasted budget surplus of approximately $4 billion for this financial year, marking the first time in 15 years that such a surplus has been predicted.
The surplus, which comes as a significant turnaround from the $36.9 billion deficit predicted in October last year, comes from the strength of the Australian jobs market, high commodity prices, and an increase in net migration.
In an article by ABC News, Minister Chalmers explained that the budget had improved by over $143 billion in the four years compared to the Coalition’s March 2022 budget.
“Our responsible economic management is all about spending restraint, substantial savings redirected to other priorities, and modest but meaningful tax changes,” he stated.
“Despite the substantial progress we’ve made, it will take more than one budget or one term to clean up the mess we inherited. We are putting the budget on a much more sustainable footing at the same time as we provide the cost of living relief and invest in the future.”
The surplus is not expected to last, however, as deficits are forecasted to return next year. The federal government is expected to grapple with rising welfare payments and increased costs associated with the National Disability Insurance Scheme (NDIS) and aged care.
The federal government also announced that it will only return 82% of revenue upgrades to the budget bottom line, a decrease from the 99% returned in the October budget.
However, Shadow Treasurer Angus Taylor criticised the government’s efforts.
“Labor should focus on not just delivering one surplus but [also on] maintaining it over the forward estimates as well,” he said.
The forecasted budget surplus of $4 billion is a crucial milestone for Australia’s economy as many are optimistic that the government will continue to work towards a more sustainable budget in the future.
The federal government has also announced a $14.6bn package of cost-of-living relief, which will include measures for renters and energy rebates of up to $500 for eligible households and small businesses.
The package will be paid for in part by savings of $17.8bn, with cuts across government agencies, the targets of which to be announced this week.
The cost-of-living relief is targeted at the most vulnerable, and the government has hinted at additional measures, but some are concerned that the increase to jobseeker payments will be limited.
The treasurer, Jim Chalmers, has promised responsible economic management and that the budget will take pressure off the cost of living.