BUDGET HOPES DAMPENED, AS DEFICIT FALLS
Chalmers hoses down Budget expectations
New Federal Treasurer Jim Chalmers has moved to dampen expectations on future budget spending, declaring that he and new Finance Minister Katy Gallagher were on a hunt to find budget savings. Dr Chalmers said he had already identified $11.5 billion in budget savings, ahead of a major spending audit by the Treasury and Finance departments. He also ruled out introducing past election revenue commitments, such as reform of franking credit, trust and negative gearing regimes. The new Treasurer said the defining challenges in the economy were “skyrocketing inflation”, rising interest rates and falling real wages. He also foreshadowed a statement on budget matters to Parliament when it returned, ahead of an October Budget statement.
Positive sign for lower budget deficit
Meanwhile, Finance Minister Katy Gallagher would have already found a positive sign in the Australian government monthly financial statements, which showed a $10 billion improvement in the budget estimates. For the financial year to the end of April, Australia recorded a deficit of $45.9 billion against the revised budget profile deficit of $56 billion. If that trend continues, the final year budget deficit will come in well under the $79.8 billion deficit projected at the 2021-22 budget, attributable to higher receipts and lower payments.
Federal Labor inching towards majority
Labor is inching towards clear majority in two seats to confirm the extent of its majority government. If its victory in the inner-Melbourne seat of Macnamara (against The Greens) is confirmed and it holds the NSW south coast seat of Gilmore, it will emerge with 77 seats and a two-seat majority. Meanwhile, counting continues for the 76-member Senate, where the Greens are poised to emerge with 12 seats in total and the Coalition seeks to restrict its losses to four seats in Western Australia, Queensland, Tasmania and the ACT. Regardless, Labor will need the support of the Greens and at least one other senator to pass Coalition-opposed legislation in the new Senate from July 1.
New broom sweeps through Coalition leadership
Two Queenslanders have taken the helm of the Coalition parties, with Peter Dutton elected the new leader of the Liberal Party and David Littleproud the new leader of The Nationals. Their deputies will both be women from the New South Wales Riverina: Member for Farrer and former Environment Minister Sussan Ley is the Liberals’ new deputy, while NSW Senator Perin Davey is the new second-in-charge for The Nationals.
Tasmanian budget on course for surplus
Tasmania has delivered its 2022-23 budget, with Treasurer Michael Ferguson announcing a projected budget deficit of $474 million before a return to surplus. Budget papers reveal an almost 100 per cent rise in net debt from $1.52 billion to $2.99 billion, financing a major increase in infrastructure investment. The Tasmanian Treasurer projected an estimated surplus of $19 million in 2023-24, with the annual state economic growth rate rising to three per cent by then.
Retail trade on recovery path
Retail trade in Australia is edging up after the easing of Covid-19 restrictions, rising almost one per cent seasonally-adjusted in the month of April and 9.6 per cent through the year to April. Australian Bureau of Statistics figures show that retail trade in April was strongest in Western Australia and Tasmania, but fell slightly in NSW.