Treasurer Scott Morrison says government tax receipts are “tracking well”, hinting at a potentially smaller deficit for the 2016-17 financial year than official forecasts, and suggesting the government was preparing itself for a looming pickup in global economic growth when it delivered its budget three months ago.
The federal treasurer said on Business Insider’s Devils and Details podcast that the budget bottom line had been seen benefits from the increasingly strong global economic outlook.
“This is the basis for why I said in the budget, ‘better days ahead’,” Morrison said, referring to his budget speech in May.
“That wasn’t a hope. That was a codification of an emerging consensus — which has really been coming since the beginning of this calendar year… and whether it’s the G20 meeting I was at earlier in the year, or the one the prime minister was just at — these signs continue.”
Published finance department statistics show the federal budget is running multiple billions of dollars ahead of government projections. Here’s the finance department data:
These results are subject to significant revisions. It’s possible billions of dollars in government spending could be transferred into the bottom line by the end of the financial year on June 30, which would deplete the underlying cash balance result significantly from its position as of May.
Tax receipts for the government will have been supported by strength in global market prices for iron ore, Australia’s biggest export commodity. Although they have seen extraordinary volatility this year, at the current level of over $US70 they are well above the $US55 forecast in the budget.
Improvements in global economic activity have surprised global markets this year. For example, Europe’s manufacturing sector has been showing surprising strength and global aviation movement has been picking up.
You can listen to Morrison’s comments below, or find the show on iTunes where you can rate us and leave a review.