Australia is set to announce another budget surplus in its annual budget, thanks to strong employment and high commodity prices. Treasurer Jim Chalmers is predicting that inflation could ease to the central bank’s target band of 2-3% by the end of this year, with measures planned to cool prices.
The budget will include an income tax cut for every Australian taxpayer worth A$395 billion over 10 years, as well as energy rebates and tax incentives for domestic industries. Chalmers is facing pressure to curb spending to avoid stirring up inflation, but he defends the measures as necessary.
Three of the big four Australian banks are expecting the government to achieve a back-to-back surplus for the fiscal year ending June 30, a feat not seen since the early 2000s. ANZ predicts a small surplus of A$4.5 billion, while Commonwealth Bank of Australia expects a surplus of A$15 billion.
However, Westpac anticipates a surplus of A$9.4 billion this year, which is likely to swing to a deficit of $10.1 billion in 2024/25 due to the mounting cost of past borrowing.
The budget is expected to focus on providing cost of living support and securing Australia’s economic and strategic future. Despite the surplus, there are concerns about the budget tipping into the red in the future. Australians are set to head to the polls again by early next year.