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Although the Federal Budget does not project a return to surplus, Budget forecasts are fairly conservative and revenue could continue to grow with commodity prices, according to UBS. ....
MacroBusiness Access Subscriber Only Content Via the excellent George Tharenou: Budget: only $8bn budget improvement over 5 years; given $96bn stimulus The Australian Government Budget, relative to the MYEFO released in Dec-20, forecasts a far smaller than expected cumulative improvement over the 5 years to 24/25 of only $8bn. Positively, 20/21 is a material $37bn better at $161bn (UBSe: $148bn, mkt: ~$160bn), or 7.8% of GDP (was $198bn or 9.9%) – albeit still the largest deficit since WW-II. However, the deficit beat by just $2bn in 21/22 at $106bn (UBS: $58bn) or 5.0% of GDP (was $108bn or 5.3%). Indeed, the deficit in 24/25 at $57bn or 2.4% of GDP is actually larger than at MYEFO. The materially stronger than expected economy improved the budget position by a cumulative $104bn over 5 years. Surprisingly however, this was almost completely offset by policy decisions (i.e. that deteriorate the budget balance), which provided far more than expected additional fis ....