Morrison guns for growth, distances Australia from surplus goal

Sydney

AUSTRALIAN Treasurer Scott Morrison is reframing the government's economic narrative towards growth and jobs and away from austerity, bowing to the fiscal reality of plunging commodity prices and recession-level wage growth.

The government's chief economic minister on Tuesday pushed out an expected return to surplus in a mid-year update of the May budget and announced deficits would be A$26.1 billion (S$26.50 billion) wider over the next four years. He also downgraded the forecast price for Australia's biggest export, iron ore, by almost 20 per cent as supply surges and growth in key trading partner China slows.

"A budget is a means to an end, it's not an end in itself," Mr Morrison told reporters in Perth, capital of Western Australia, which is in the middle of a massive unwinding of mining investment. "It's there to support the government's core objective, and that is jobs and growth." The new narrative fits better with the reality Australia confronts as the economy adjusts to the end of a windfall from record-high commodity prices. Yet the widening deficit is a challenge to new Prime Minister Malcolm Turnbull less than 12 months out from an election, limiting his scope…