BUDGET SURPLUSES – AUSTRALIA

Slowdown threatens budget surplus

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Original article by John Kehoe
The Australian Financial Review – Page: 3 : 10-Jan-19

Fitch Solutions has cast doubt upon the federal government’s timetable for a return to a Budget surplus. The government expects a surplus equivalent to 0.2 per cent of GDP in 2019-20, but Fitch has forecast that factors such as slowing economic growth will result in a deficit equivalent to 0.1 per cent of GDP for the financial year. The firm warns that increased government spending and slowing global economic growth will also delay the return to a surplus. Fitch’s forecast of a 2018-19 deficit equivalent to 0.3 per cent of GDP is in line with the government’s projections.

CORPORATES
FITCH SOLUTIONS, FITCH RATINGS LIMITED, AUSTRALIA. DEPT OF THE TREASURY, UBS HOLDINGS PTY LTD, DELOITTE ACCESS ECONOMICS PTY LTD, RESERVE BANK OF AUSTRALIA

Coalition $30bn in the black

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Original article by Simon Benson, David Uren
The Australian – Page: 1 & 2 : 17-Dec-18

The federal government’s mid-year economic and fiscal outlook is expected to show that increased company tax revenue and reduced spending will result in a Budget surplus of about $4bn in 2019-20, compared with a previous forecast of $2.2bn. The surplus is expected to total $30bn over the next four years, up from the $15.3bn surplus that had been forecast in the May 2018 Budget. Meanwhile, the deficit for 2018-19 could be just $5bn, down from previous expectations of $14.4bn. The mid-year budget update will be released on 17 December.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF FINANCE, AUSTRALIAN LABOR PARTY, DELOITTE ACCESS ECONOMICS PTY LTD, AMP LIMITED – ASX AMP

Almost back in black as $126bn sliced off debt

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Original article by Adam Creighton
The Australian – Page: 1 & 6 : 9-May-18

The Federal Government has forecast a modest Budget surplus of $A2.2bn in 2019-20. The Budget had previously been expected to return to surplus in 2020-21, compared with a likely deficit of $A18.2bn in 2017-18. Meanwhile, Australia’s gross debt is now slated to be $A558bn in 2027-28, compared with expectations of $A684bn in the mid-year Budget update in December. Net debt is expected to fall to 3.8 per cent of GDP by 2029, down from a peak of 18.6 per cent in 2017-18.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, STANDARD AND POOR’S FINANCIAL SERVICES LLC

Morrison locks in tax limits

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Original article by Simon Benson
The Australian – Page: 1 & 4 : 7-May-18

The Federal Government’s May 2018 Budget is expected to restrict tax cuts to people with taxable income of less than $A87,000. The tax cuts are likely to be delivered via the low-income tax offset, while Treasurer Scott Morrison has indicated that people on higher incomes are likely to receive tax cuts by 2024. Morrison stresses that the tax cuts in the 2018 Budget will be real and affordable. Meanwhile, the Government will use the Budget to formally adopt a tax-to-GDP ratio of 23.9 per cent, while it is tipped to forecast a modest surplus in 2019-20, which is one year ahead of schedule.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF FINANCE, AUSTRALIAN LABOR PARTY

Labor plan: spend and tax to bigger surpluses

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 3-May-18

The Australian Labor Party will raise at least $A160bn in additional revenue over 10 years if it wins the next federal election. This would be boosted by $A35bn if Labor revoked company tax cuts that have yet to be legislated. Labor argues that the additional revenue would allow it to achieve a Budget surplus while increasing government spending in sectors such as health and education. Finance Minister Mathias Cormann has warned that Labor’s tax plan will have an adverse impact on jobs and investment.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF FINANCE, AUSTRALIA. DEPT OF THE TREASURY

Budget surplus to be brief: PBO

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Original article by David Uren
The Australian – Page: 1 & 2 : 8-Dec-17

Treasurer Scott Morrison has downplayed modelling by the Parliamentary Budget Office which suggests that productivity will need to increase in order to ensure that a Budget surplus is sustained. The Federal Government has forecast that it will post surpluses equivalent to 0.3 per cent of GDP from 2020-21, although this is based on expectations that productivity growth will remain at the long-term average of 1.6 per cent. However, growth in productivity has averaged just 1.35 per cent over the last decade, and the PBO’s analysis has found that the Budget will be "broadly balanced" by 2027-28 unless productivity growth improves.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. PARLIAMENTARY BUDGET OFFICE, AUSTRALIA. PRODUCTIVITY COMMISSION, INTERNATIONAL MONETARY FUND, AUSTRALIAN LABOR PARTY

We’re on the brink of recession but the government has its head buried in the sand

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Original article by John Hewson
The Sydney Morning Herald – Page: 18 : 23-Dec-16

The Australian Government’s Mid-Year Economic and Fiscal Outlook, issued on 20 December 2016, is based on assumptions of dubious validity. Australia’s GDP declined 0.5 per cent in the September 2016 quarter and yet the Government forecasts consistent economic growth over the next five years. Contrary to optimistic forecasts of the Government, Australia may soon experience a recession.

CORPORATES
AUSTRALIAN NATIONAL UNIVERSITY

Decade of despair: 10 giant surpluses needed to wipe debt

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Original article by David Uren
The Australian – Page: 1/ & 6 : 12-Jul-16

A report produced by Tony Makin and Julian Pearce of Griffith University highlights the challenge confronting the Australian Government in reining in the national debt. They estimate that it would need to achieve surpluses equivalent to 2.2 per cent of GDP each year over the next decade in order to eliminate net debt. This is much higher than the average surpluses achieved by the Coalition government of John Howard and the Labor governments of Bob Hawke and Paul Keating.

CORPORATES
GRIFFITH UNIVERSITY, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY