Canberra: Australian Treasurer Jim Chalmers announced that the country’s budget deficit has improved by tens of billions of dollars.
Ahead of the final budget outcome slated to be released later this month, Chalmers said the budget deficit for the financial year 2021-22 has come in A$50 billion ($33 billion) lower than projected by the government in March, reports Xinhua news agency.
He said A$28 billion of the improvement came from higher-than-expected revenues — mostly a result of high global commodity prices — A$20 billion from payments that were lower than expected.
However, the deficit will still be “a little bit north” of A$30 billion and Chalmers warned it could worsen as a result of a downturn in coal and iron ore prices.
“And what we know from the Final Budget Outcome is that this substantial improvement is welcome, but the bulk of it is driven by temporary factors,” he told reporters here.
Chalmers and Finance Minister Katy Gallagher said at the same press conference that Australians should expect a “bread and butter” budget including a “substantial but temporary” lift in taxes.
“And we’ve come in, and we’re telling you that there are enormous pressures and the Budget is in structural deficit,” said Gallagher.
“And we’re doing what we can in the October Budget to go through the previous measures, the waste audit, having a look at making sure that the spending that’s currently being provided is going where we need it the most.”
The government’s tax on petrol will be reinstated at its full rate on September 29 after it was cut earlier in 2022 in response to a global spike in fuel prices.
Chalmers said deciding not to extend the relief measure was “difficult” but projected fuel prices would not spike overnight.
“We’re under no illusions that this will be difficult for people. It’s a difficult decision for us to take as well,” he said.