SYDNEY (Reuters) – Australia is set to deliver its first budget surplus in 15 years on Tuesday, as its coffers bulge with tax windfalls from higher commodities prices and wages, a political win for the centre-left Labor government since coming to power last May.
The budget will forecast a small surplus of around A$4 billion ($2.71 billion) for the fiscal year ending June, a huge turnaround from a projected deficit of A$36.9 billion in October, according to excerpts seen by Reuters.
Deficit estimates for the subsequent years have also been revised lower.
The government is returning 82% of revenue upgrades to the budget bottom-line while making $17.8 billion in savings and reprioritisations, based on the excerpts.
That brings the total savings found across the two budgets delivered so far by the Labor government to A$40 billion.
“Our responsible economic management is all about spending restraint, substantial savings redirected to other priorities, and modest but meaningful tax changes,” said Treasurer Jim Chalmers.
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“We are putting the Budget on a much more sustainable footing at the same time as we provide cost of living relief and invest in the future.”
Prime Minister Anthony Albanese’s government has announced A$14.6 billion in cost of living relief, which Chalmers promises won’t worsen inflation as the central bank raises rates to keep price rises in check.
The government will also set aside a A$11.3 billion for wage rises for aged care workers and extend financial support for single parents.
($1 = 1.4758 Australian dollars)
(Reporting by Stella Qiu; Editing by Sam Holmes)