The Australian government has announced that it will report a smaller revenue increase in its federal budget for the year ended June 30 compared to recent years. Treasurer Jim Chalmers attributed this to a combination of global economic weakness and a slowing domestic economy, with expectations of a budget surplus on May 14 no longer likely.
Despite predictions of tax receipt upgrades in the budget, excluding those from goods and services tax, being more than A$100 billion above the average upgrade of A$129 billion seen in the last three budgets, this is unlikely due to falling commodity prices, a softening labour market, and weaker economic conditions.
Chalmers emphasized the need for a realistic approach to managing Australia’s economic challenges. He pointed to rising unemployment as significant factors influencing the change in revenue upgrades and noted that massive revenue upgrades seen in previous budgets were unlikely to continue. Chalmers also expressed concerns about events in the Middle East impacting the global economy and shaping government decisions for May.
