Iron ore and commodity prices halved Australia’s budget deficit
How ‘extraordinary’ iron ore and commodity prices HALF Australia’s budget deficit, a big relief for Anthony Albanese
- Treasurer Jim Chalmers says budget improvement is due to commodity prices
- The underlying fiscal deficit for the previous fiscal year was $33.4 billion
- Angus Taylor Claims Coalition Economic Management Is Responsible For The Outcome
- Opposition leader Peter Dutton wants government to double pension income
Treasurer Jim Chalmers says the marked improvement in the budget is partly a reflection of the ‘pretty extraordinary’ prices Australia is getting for its raw materials.
The monthly financial statement released Friday by the Treasury Department shows that the underlying budget deficit was $33.4 billion in May, compared to the $60.5 billion expected after 11 months of fiscal year 2021/22.
The March budget forecast a full-year deficit of $79.8 billion.
Treasurer Jim Chalmers (pictured) claimed the budget improvement was partly due to ‘extraordinary’ raw material prices
“Obviously we want those numbers to come in strong,” Dr. Chalmers on ABC’s Insiders program on Sunday.
“But what they don’t take into account is the volatility of our commodity prices. I think iron ore fell by 12 percent last week, which has budget implications.’
In a tweet, shadow treasurer Angus Taylor boasted that the strong budget result was due to the strong economic management of the coalition government.
“Interesting that Labor is trying to quietly release these numbers on a Friday afternoon,” he tweeted.
The monthly statement is usually released on a Friday afternoon.
dr. Chalmers said a number of things were working against the budget, including interest payments on the trillion dollars of debt that Labor has inherited.
‘As interest rates get higher and higher, so do the costs of paying off that debt. So that’s an extra strain on the budget,” he said.
“The budget has a pretty big structural deficit, if you look at the dignified and justified spending that’s in the budget, and higher borrowing costs is one of those extra pressures.”
dr. Chalmers will release its first budget in October.
The high price of iron ore also helped the strong budget result, but Dr. Chalmers said commodity prices are volatile, which has “budget implications.”
Opposition leader Peter Dutton (pictured) wants the federal government to double pension income
Opposition leader Peter Dutton told News Corp Australia that he wanted the federal government to double the amount retirees could earn without cutting pension payments to $600 every two weeks.
It would aim to reduce chronic labor shortages seen across the economy.
dr. Chalmers said both sides of parliament looked at this before the election because there was a need for a larger pool of available workers.
“I’ve had good, productive conversations with National Seniors and others about whether we can do something here,” he said.
‘Even such an idea, which seems relatively modest, still carries a relatively hefty price tag.’
It is an issue that will be addressed at the government jobs summit in September, which will bring together business and trade unions.
dr. Chalmers will also provide an economic update in a ministerial statement when parliament returns in July, which will include the government’s projections for inflation.
“That will show that inflation will get worse before it gets better,” he said.
“That’s the expectation across the board now, so that’s a tough situation to face before hopefully inflation moderates over the course of next year.”