Treasurer Joe Hockey has released the mid year budget update, MYEFO, showing the 2014-15 budget deficit now forecast at $40.4 billion compared to the $29.8 billion forecast in the May budget.
The deficit in 2017/18 is now expected to be $11.5 billion rather than the $2.8 billion May budget estimate.
The new forecasts show cumulative deficits of $103.9 billion over four years.
Economic growth isn’t forecast to change, with GDP staying at 2.5% this financial year. Inflation will move slightly higher with the Consumer Price Index at 2.5% from 2.25%.
The mid-year economic and fiscal outlook shows unemployment reaching reach a 12-year high of 6.5% this financial year compared to the latest official number of 6.3%.
The rate isn’t forecast to fall until 2016-17 when unemployment will fall to 6%.
The MYEFO forecasts on deficits:
2014-15 – $40.4 billion Vs $29.8 billion (May)
2015-16 – $31.2 billion Vs $17.1 billion (May)
2016-17 – $20.8 billion Vs $10.6 billion (May)
2017-18 – $11.5 billion Vs $2.8 billion (May)