Australia’s budget surplus set to be nearly five times higher than forecast

By Lewis Jackson

SYDNEY (Reuters) – Australia Treasurer Jim Chalmers said on Monday the country’s first budget surplus in 15 years would be even larger than first forecast.

Chalmers said the budget surplus for the financial year just past was likely to be a little over A$20 billion dollars, well up from the A$4.2 billion projected in the May budget as first flagged last month.

“The current expectation of the officials is that the surplus for 2022-2023 will be around twenty billion dollars, or more likely just north of that figure,” Chalmers told a news conference in Canberra.

The final figures, due within weeks, mark an astonishing turnaround from the A$37 billion deficit forecast as recently as October thanks to higher tax revenue from low unemployment, rising wages and record commodity exports.

The surplus will be short-lived, with deficits forecast this financial year and next due to rising interest bills and spending on disability care, health and defence.

Chalmers reiterated forecasts for economic growth to slow this year. Australia is closely monitoring weaker economic data coming out of China, its largest trading partner, he said, but has not downgraded its own growth forecast.

“We need to be realistic about the consequences and the implications of the rate rises on our economic and this global uncertainty which we all confront. China is part of that story,” he said.

Chalmers also announced Chris Barrett would head Australia’s Productivity Commission, an independent research and advisory body. Barrett was an ambassador to the OECD, and, like Chalmers, served as chief of staff to former Treasurer Wayne Swan.