Here’s the damage:
The federal government’s budget deficit for this financial year is forecast to blow out to $47 billion from $30.1 billion.
This is $17 billion more than the last forecast in August, just before the September election saw a new Coalition government installed.
“We will fix the budget. We will fix the economy,” Treasurer Joe Hockey told the National Press Club.
Without policy changes, Hockey said, the Budget would not return to surplus within the 10-year medium-term projections. “During this time, gross debt on issue is projected to increase to $667 billion.”
The big problem, that of falling government revenue, continues.
Income tax revenue forecasts this year are now $246.2 billion, a further 1.9 per cent fall since August.
And total tax revenue is forecast to fall 1.3 per cent to $343.48 billion.
The deterioration in the underlying cash balance since the August forecasts (the 2013 PEFO) is $16.8 billion in the 2013-14 financial year.
The combined deficits over the four years, the current financial year plus three years, total $123 billion.
Net debt is will be about $191.5 billion (12.1 per cent of GDP) in 2013-14 and is expected to reach $280.5 billion (15.7 per cent of GDP) in 2016-17.
Other forecasts for 2013-14 in the MYEFO (Mid Year Economic and Fiscal Outlook):
Real GDP: unchanged at 2.5 per cent (but downgraded to 2.5 per cent in 2014-15 from 3 per cent)
Unemployment rate: 6 per cent (previously 6.25 per cent)
CPI: 2.75 (previously 2.5 per cent)