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Lowest deficit in a decade: now $10.1 billion V’s $29.4 billion in 2017

Financial commentator Peter Switzer has shed some positive light of the current state of the national deficit in a recent article on switzer.com.au.

 

In May 2017 the budget deficit for 2017/18 was predicted to be $29.4 billion. Fast forward to May 2018 and this figure has been revised down to $18.2 billion. Now, four months later, that figure has dropped once again to $10.1 billion.

 

With regards to Government debt, the figure of $342 billion was announced in June 2018 (18.6% of GDP) which is $13 billion lower than what was predicted in the 2017/18 budget.

 

Another notable figure was rolling annual debt – the smallest in nine years. Since the year to March 2009, this figure was $6,563 million.

 

Mr Switzer says these figures show public debt is on the right track and the quicker the economy gets to surplus, the better. In the Howard/Costello era of Labor in government, the surplus at that time, coupled with the mining boom, gave Labor “ammunition to fight the forces of recession and helped us keep unemployment under 6%.” This was at a time when the USA has employment sitting at 10%.  

 

The Australian newspaper has indicated a surplus is “in sight ahead of election,” which will no doubt have the politicians touting the positive news in upcoming campaigns.

 

All eyes are on Donald Trump and the USA trade agreements with regards to Australia achieving the surplus that is possibly within reach, indicates Mr Swtizer.  If these ‘trade wars’ turn sour, they could in fact lead to a stock market crash which would in turn affect the Australian economy.

 

Businessinsider.com.au reports that Treasurer Josh Frydenberg says the good results are due to employment and stronger economic growth which increased personal income tax and company tax payments. Welfare reliance for working age Australians is now “lowest level in 25 years and in 2017-18.”

 

“This Final Budget Outcome builds on the release of the National Accounts earlier this month, which showed that the economy grew 3.4% through the year — the fastest rate of growth since the September quarter 2012 during the height of the mining investment boom and faster than any G7 economy,” said Mr Frydenberg.  

 

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