Slowing global economy to mean smaller revenue bump in Australian budget
2024.05.05 08:52
SYDNEY (Reuters) – Global economic weakness and a slowing domestic economy were among the reasons Australia will report a smaller revenue increase in its federal budget for the year ended June 30 compared to recent years, the government said on Sunday.
The Labor government is expected to report a budget surplus on May 14, although it flagged in March a revenue upgrade would be smaller than the year before as commodity prices fell and the labour market softened.
On Sunday, it said tax receipt upgrades in the budget, excluding those from goods and services tax, were expected to be more than A$100 billion ($66.08 billion) below the A$129 billion average upgrade in the last three budgets.
The anticipated result was because of weakness in the global economy, a slower domestic economy, a softening labour market and lower commodity prices, it said.
“We are realistic about the challenges facing our economy and our budget – this includes not expecting the same sorts of massive revenue upgrades that we’ve seen in recent budget updates to continue,” Treasurer Jim Chalmers said in a statement.
Chalmers has previously pointed to weaker commodity prices, in particular for major export iron ore, and rising unemployment as key drivers for the change. Australia’s jobless rate hit a two-year high of 4.1% in January.
In April he warned that events in the Middle East were fuelling concerns for the global economy and would shape the government’s budget in May.
($1 = 1.5133 Australian dollars)
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