This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/business-30474648
The article has changed 2 times. There is an RSS feed of changes available.
Previous version
1
Next version
Version 0 | Version 1 |
---|---|
Australia's budget deficit to widen by A$10bn | Australia's budget deficit to widen by A$10bn |
(about 1 hour later) | |
Australia's government has said it expects the nation's deficit to grow to $40.4bn Australian dollars ($33.2bn; £21.2bn) in the 12 months to June. | Australia's government has said it expects the nation's deficit to grow to $40.4bn Australian dollars ($33.2bn; £21.2bn) in the 12 months to June. |
Earlier in the year, the deficit for the period had been forecast to come in at A$29.8bn. | Earlier in the year, the deficit for the period had been forecast to come in at A$29.8bn. |
The country's treasurer, Joe Hockey, said falling prices for key export commodities had hurt the economy. | The country's treasurer, Joe Hockey, said falling prices for key export commodities had hurt the economy. |
The nation's mid-year economic outlook was delayed on Monday due to a siege situation in Sydney. | The nation's mid-year economic outlook was delayed on Monday due to a siege situation in Sydney. |
Mr Hockey predicted the shortfall for the 2015-16 financial year would be A$31.2bn, up from a previous forecast of A$17.1bn. | Mr Hockey predicted the shortfall for the 2015-16 financial year would be A$31.2bn, up from a previous forecast of A$17.1bn. |
The Mid-Year Economic and Fiscal Outlook (MYEFO) updates Australia's economic outlook from the previous budget. | The Mid-Year Economic and Fiscal Outlook (MYEFO) updates Australia's economic outlook from the previous budget. |
More work to do | More work to do |
The report said the nation's tax receipts had been revised down by $A31.6bn due to a more than 30% fall in iron ore prices, together with weaker-than-expected wage growth. | The report said the nation's tax receipts had been revised down by $A31.6bn due to a more than 30% fall in iron ore prices, together with weaker-than-expected wage growth. |
"Government payments have also been affected," the MYEFO report said. | "Government payments have also been affected," the MYEFO report said. |
"Delays in passing legislation and negotiations with the Senate have cost the budget more than $A10.6bn over the forward estimates, keeping debt and interest payments higher for longer." | "Delays in passing legislation and negotiations with the Senate have cost the budget more than $A10.6bn over the forward estimates, keeping debt and interest payments higher for longer." |
The report also said the deficit should narrow to $A11.5bn by between 2017 to 2018. | The report also said the deficit should narrow to $A11.5bn by between 2017 to 2018. |
"This reinforces that there is much more work to do and budget repair will take time," it said. | "This reinforces that there is much more work to do and budget repair will take time," it said. |
Sydney-based economist Katrina Ell told the BBC that falling iron ore prices and stubbornly soft growth in the non-mining sector meant "a budget blowout was going to occur". | |
"The initial budget estimates back in May seemed overly optimistic," she said. | "The initial budget estimates back in May seemed overly optimistic," she said. |
Not all bad | Not all bad |
Despite the change to the deficit forecast, the government noted that Australia's economy would continue to be supported by historically low interest rates, lower energy prices, and a weaker Australian dollar. | Despite the change to the deficit forecast, the government noted that Australia's economy would continue to be supported by historically low interest rates, lower energy prices, and a weaker Australian dollar. |
One area of focus for future growth would be continued investment in infrastructure projects, which would help create more jobs and reduce congestion in busy urban areas. | One area of focus for future growth would be continued investment in infrastructure projects, which would help create more jobs and reduce congestion in busy urban areas. |
"In total, the [infrastructure package] will lead to over $A125bn of new productive infrastructure over the next decade," the MYEFO said. | "In total, the [infrastructure package] will lead to over $A125bn of new productive infrastructure over the next decade," the MYEFO said. |
Ms Ell also explained that the government was "accepting its budget blowout rather than cutting back spending further to get a medium-term surplus". | Ms Ell also explained that the government was "accepting its budget blowout rather than cutting back spending further to get a medium-term surplus". |
"This means that there will not be additional pressure on public sector jobs and wages, which is good news for household spending and the broader economy." | "This means that there will not be additional pressure on public sector jobs and wages, which is good news for household spending and the broader economy." |
She said it was not appropriate for the nation's fiscal policy to tighten further. | She said it was not appropriate for the nation's fiscal policy to tighten further. |
"For over two years, monetary policy has been doing the heavy lifting to guide a smooth transition away from mining investment and towards domestic drivers," she said. | "For over two years, monetary policy has been doing the heavy lifting to guide a smooth transition away from mining investment and towards domestic drivers," she said. |
"It's time for fiscal policy to step up to the plate and aid the transition." | "It's time for fiscal policy to step up to the plate and aid the transition." |
Previous version
1
Next version