Australia’s government budget deficit will undershoot market forecasts and keep improving over time, Treasurer Joe Hockey said – just hours before delivering his annual policy package. Speaking to the media, Hockey said the market was forecasting a shortfall of around A$40-A$41 billion but the actual deficit would “beat that”.
Hockey said the government had been forced over the past 18 months to write off A$90 billion of expected revenue, partly due to a slide in prices for iron ore, the country’s biggest export earner. “Yet we are still on a credible trajectory back to surplus,” said Hockey.
Prime Minister Tony Abbott’s conservative government is taking a far more cautious approach to their second budget after last year’s attempt at slashing spending and welfare proved politically disastrous. This time all the talk is of a “fair” budget aimed at strengthening the economy and ensuring the “integrity” of Australia’s tax system.