Treasurer Jim Chalmers has refused to say whether the Commonwealth’s deficit has exceeded forecasts ahead of a budget update.
Although Dr Chalmers did not say whether the deficit was above the cumulative four-year total forecast of $122.1 billion, he did indicate that there had been some “slippage.”
‘You will see all the numbers on Wednesday. “Not every year there have been gaps,” Dr Chalmers told Sky News on Sunday.
“We’ve been able to do a little better in the short term, but there have been some slip-ups for reasons we’ve been honest about.”
Dr. Chalmers said the growing deficit was due to slowing economic growth, lower-than-anticipated mining exports, plus what he called “variations in spending” on Medicare, early childhood education and natural disasters.
There were also increases in payments to veterans that will add $1.8 billion to spending.
“This is because we are addressing the backlog we inherited from the Coalition,” Dr Chalmers said.
“(We’re) giving veterans the help they need and deserve, but it comes with another $1.8 billion price tag, and that will be one of the most substantial pressures in the midyear budget update, one of a handful of pressures.” quite significant pressures that we have had to adapt to.’
Treasurer Jim Chalmers has refused to say whether the Commonwealth’s deficit has exceeded forecasts.
Dr Chalmers denied any plan, as far as he knew, to call an election before the March budget to avoid criticism of deteriorating results.
“Of course, I see the comments, and I see the pundits and everyone else speculating, as they always do, understandably, about the timing of the election,” he said.
‘The timing of the elections depends on Anthony. From my point of view, and that of (Finance Minister) Katy Gallagher, we are certainly preparing for a budget in March.’
‘We have been working simultaneously on the mid-year budget update, which we published on Wednesday, and the budget we are preparing for March.
“We work around the clock and all year round with these budgets.”
Shadow treasurer Angus Taylor told Sky News the budget was “falling off a cliff”, with government spending spiraling out of control as the economy set a dismal record of seven consecutive quarters of recession per capita.
“This is a disastrous budget situation that reflects the government taking us down the path of economic ruin,” he said.
The May budget forecast a surplus of $9.3 billion for the financial year 2024-25, followed by four consecutive deficits of $28.2 billion in 2025-26, $42.8 billion in 2026-27, $26.7 billion in 2027- 28 and 24.3 billion dollars in 2028-29. .
Dr. Chalmers indicated that increased Medicare spending was one of the reasons for the sliding deficit (file image)
Recent figures show Australia’s economy is barely growing despite record levels of immigration and government spending, as the country enters the longest per capita recession in its history.
The country’s gross domestic product grew just 0.8 percent in the year through September.
Apart from the Covid lockdowns, this represented Australia’s weakest level of economic activity since the 1991 recession, but is accompanied by rampant inflation, a litany of interest rate rises and some of the house prices between the highest in the world.
Australian Bureau of Statistics data showed GDP per capita fell 1.5 percent over the year, continuing a per capita recession that began in early 2023 with September’s 0.3 percent drop that It marked the seventh consecutive quarter of decline.
The per capita decline is now even worse than the crisis of the early 1980s, when Australia had double-digit unemployment and inflation.
One of Australia’s top economists last week shared data showing the country has fallen behind other developed nations in a key economic area over the past 12 months.
AMP chief economist Shane Oliver shared a graph on social media on Friday showing the change in labor productivity for more than 17 comparable economies over the past year, with Australia ranked last.
According to Oliver data, Australia’s labor productivity, which is a generalized measure of how much output is produced per hour of work, has fallen more than 1 percent in 2024.