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Australia government sees bigger budget surpluses ahead
[SYDNEY] Australia's conservative government on Monday forecast its budget deficit for the fiscal year to June 2019 would shrink to A$5.2 billion (S$5.13 billion), from the A$14.5 billion projected back in May.
The Liberal National government of Prime Minister Scott Morrison touted the improved numbers as evidence of its economic competence ahead of an election next year. The coalition is trailing badly in opinion polls after ousting former prime minister Malcolm Turnbull in a party coup in August.
In his half-year fiscal outlook, Treasurer Josh Frydenberg reiterated the budget would return to surplus by 2019/20, ending more than a decade of deficits.
He projected a surplus of about A$4.1 billion for the year to June 2020, up from the May budget estimate of A$2.2 billion. Over the four-year forward estimates, the cumulative surplus was forecast to be twice the original estimate at around A$30 billion.
"The combination of a growing economy with a record number of people in work is helping both sides of the ledger, increasing our revenues while also decreasing our expenditure," Mr Frydenberg told reporters in Canberra.
The government predicted the economy would grow at 3 per cent in 2018/19 and the two years following. The forecast for unemployment was lowered to 5 per cent, recognising surprising strength in employment this year which has already pushed the jobless rate down to that level.
Wage growth, which has been stubbornly sluggish, was predicted to pick up to 3.5 per cent by 2020/21, from the current 2.3 per cent. Wages were growing at a record low of 1.9 per cent as recently as 2017.
Finance minister Mathias Cormann dangled the prospect of announcing tax cuts ahead of the next election, due by May 2019.
"It is no secret we are committed to lower taxes as part of our plan to strengthen the economy," Mr Cormann said.