The Federal Budget deficit has reduced by $1.3 billion, to $26.9 billion.
In providing his Mid-Year Economic and Fiscal Outlook (MYEFO), Federal Treasurer Jim Chalmers said current figures showed an improvement in the bottom line, from the $28.3 billion deficit announced in the May Budget.
Treasurer Chalmers said the economy was growing, inflation was moderating, real wages were growing and unemployment was low.
“The Australian economy is on track for a soft landing, with the economy continuing to grow, a record for jobs created in a Parliamentary term, participation near record highs, real wages and household incomes growing again, the gender pay gap narrower than ever before and business investment at decade highs,” he said.
Treasurer Chalmers said average real spending growth would be 1.5 percent over the six years to 2027–28, which was “less than half the 30-year average”.
He said the Government had identified $14.6 billion in savings and reprioritisations.
“Gross debt is forecast to peak at 36.7 percent of GDP, which is 8.2 percentage points lower than projected at PEFO (Pre-election Economic and Fiscal Outlook).”
He said the Budget deficit was largely because of “urgent, unavoidable or automatic increases in spending in areas like pensions, Medicare and medicines”.
“This mid-year update includes $8.8 billion in unavoidable spending.
“We’ve also had to account for $16.3 billion in payment variations to ensure veterans receive their entitlements, to index pensions, to increase support to families, to support disaster recovery and support increased demand for health services.”
Read the full Mid-Year Economic and Fiscal Outlook.
