Australia eyes bigger budget surplus

Strong jobs growth and bumper mining profits will swell government coffers. — Reuters

SYDNEY: Australia’s budget surplus for 2022 and 2023 will be bigger than the A$4.2bil (US$2.81bil or RM13bil) projected in the May budget but high inflation and global challenges will “significantly slow” the domestic economy, treasurer Jim Chalmers says.

Strong jobs growth and bumper mining profits will swell government coffers, similar to the forecast during the federal budget, while spending curbs and A$40bil (RM124bil) in savings have also boosted the budget bottom line.

“I can reveal that we’re expecting the surplus will be bigger than forecast in May,” Chalmers said in a speech to the Property Council of Australia.

“In fact, we’re in a significantly better position than we forecast.”

Australia’s Labour government in May boasted the first budget surplus in 15 years for the year to June 2023, a huge turnaround from the A$37bil (RM114.7bil) shortfall forecast last October.

But Chalmers said the increases in interest rates by the Reserve Bank of Australia, which now sit at an 11-year high, and warnings more tightening may be required to push inflation to target will put the brakes on economy. — Reuters

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