Australia is on the fast track to recording the first budget surplus since Peter Costello was Treasurer, allowing for new pre-election spending on aged care.
Treasurer Josh Frydenberg on Monday handed unveil what he’s billing as the best budget books since John Howard was prime minister, and with an eye on the election, it will include more help for seniors.
The New Daily understands the outlook will predict Australia is on track to deliver a surplus in 2019-20. The updated figures will also show the budget deficit in 2018-19 is at its lowest level since 2007-08.
The Mid Year Fiscal and Economic Outlook figures will forecast the smallest deficit in more than 10 years, with the forecast slashed from $14 billion to less than $7 billion.
“As the Prime Minister has made clear, next year, we will deliver a budget surplus – the first in a decade,” Mr Frydenberg said.
“This will be achieved without increasing taxes and while providing the essential services that Australians rely on and investing in the critical infrastructure that Australia needs,” he said.
“A strong economy means we can deliver tax relief for individuals as well as small and family businesses. It also means we can deliver the essential services like health care, disability support, aged care and schools, which Australians rely on.
“We are able to do this without raising taxes. In contrast, Labor plans to slug $200 billion in taxes on your income, your property, your savings and your electricity.”
But the election could deny Mr Frydenberg the right to be the first treasurer in more than a decade to bank a budget surplus.
The release of MYEFO today comes as another poll predicts Labor is on track for victory with 54 to 46 per cent in two-party terms a result that would deliver the loss of 18 Coalition seats.
However, the Ipsos-Nine poll shows voters remain divided over Labor’s policy on capital gains and negative gearing.
If Labor wins the next election, that honour of delivering a surplus will fall to shadow treasurer Chris Bowen, after successive treasurers from Wayne Swan to Joe Hockey, to Scott Morrison promised, but failed, to deliver.
Mr Bowen said the Coalition’s mid-year update will show it has no plan to manage the budget and economy apart from relying on a resurgent global economy.
“Of the $9 billion in unexpected improvements since the last budget, two-thirds have been further increases in tax, and the government is collecting $100 billion more tax this year than in 2013,” he said.
“Even with billions of dollars rolling through the door due to rosy global conditions, the Liberals have more than doubled net debt and gross debt has crashed through half-a-trillion dollars on their watch for the first time ever.
“If Morrison and co cared about fixing their budget mess, they’d adopt Labor’s structural improvements to the tax system, including reforms to negative gearing and capital gains, dividend imputation and family trusts.”
The May budget forecast a 2018-19 deficit of $14.4 billion, however government sources confirmed what recent financial and economic data have already foreshadowed: the forecast deficit is likely to be cut by more than half.
The better-than-expected figure is a result of higher tax receipts and lower payments.
Employment grew by 308,100 persons over the year to October 2018.
In another win for the Morrison government, today’s figures will confirm the lowest proportion of people of working age on welfare in 25 years.
Consumer confidence has remained above 100 for every month over the last 12 months – the longest consecutive run since 2011.