Josh Frydenberg vows to deliver 2020 surplus as deficit slims to $690M

Handing down his final Budget Outcome for the 2018-19 financial year on Thursday, Treasurer Josh Frydenberg claimed that the budget deficit has shrunk to $690 million, which is the lowest it has been in more than a decade.

The final budget outcome for the year to June 30 is massively down from the $4.2 billion deficit that was forecast in April this year, and the $14.5 million deficit predicated when the original budget was first handed down in May last year. The drastically reduced figures have been put down to restrained government spending, as well as a boost in corporate profits due to high iron ore prices.

The Budget Outcome shows that the government brought in higher total receipts of $11.5 billion and lower total payments of $6.6 billion. With today’s announcement placing the Coalition on track to deliver its promise of a surplus this financial year.

Speaking this morning from Parliament House, he said: “These outcomes demonstrate the Government’s economic plan is working and confirming the budget is on track and will be back in the black for the 2019/20 year.

“Importantly, Australia has completed its 28th consecutive year of economic growth, and maintains its triple-A credit rating, with more than 1.4 million jobs created since we came to Government.”

He added: “In the year ahead the economy will continue to be supported by the Government’s economic plan as outlined in the 2019-20 Budget, including the largest tax cuts in two decades, and our $100 billion pipeline of infrastructure investment.”

Frydenberg was also keen to point out the Coalition’s success in the area of employment growth, revealing that a total of 300,000 additional jobs were created in the 2018-19 financial year. These figures mean that employment grew by 2.6 per cent over the 12-month period, compared to the forecasted growth of 1.5 per cent.

“A growing economy with more jobs and stronger terms of trade than anticipated at the time of the 2018/19 budget has driven total receipts $11.5bn higher, with payments $6.6bn lower than expected at the time of the 2018/19 budget,” he said, in a joint press conference with Finance Minister Senator Mathias Corman. “Employment growth far exceeded expectations at the time of delivering the 2018/19 budget in May 2018.’

However reporters in Canberra quizzed the treasurer about household spending which came in around $4 billion lower than the figure projected, with one journalist asking him during the live press conference: “Do you reconcile the fact you have more people in work but they are spending far less?”

To which Frydenberg replied: “Obviously we want household consumption to be higher, and as you know household consumption is 60% of GDP. One of the ways we can drive that is through the tax relief that is being legislated through the parliament.

“The last two budgets, more than $300 billion. You have heard from the reserve Bank governor, while some people are paying down the debt without tax relief that is slowing their way, others are spending it in the economy, and it will boost disposable income.”