Economy
Commodity prices threaten budget surplus: economist
An independent economic forecaster is predicting a shortfall in mining tax revenue will turn the Federal Government’s promised budget surplus into a deficit.
In last month’s budget update, Treasurer Wayne Swan forecast a small $1.1 billion surplus for this financial year.
But Chris Richardson from Deloitte Access Economics says the budget is now heading for a $4.2 billion deficit because of falling commodity prices and China’s economic slowdown.
He says the Government is still betting the mining tax will deliver billions of dollars to government coffers, even though it yielded no revenue in its first three months.
“That means even before the ink was dry on that Government update, the budget was back in deficit probably to the tune of $4 billion this financial year and $5 billion next financial year,” he said.
Mr Richardson says the slowdown in China has also hit tax revenue.
“The slowdown in China and its impact on coal and iron ore prices is more important for the average Australian than I think they realise,” he said.
“In a typical year, Australian national income would grow $80 billion or $85 billion – treasury is forecasting $60 billion this year and we think it might be a little less – and that hurts.”
He says the budget will head into deficit unless the Government cuts spending further or raises revenue.
• Christine Milne: Is “Turn Back Wildlife” Abbott’s next slogan in war against carbon price?
Protecting and enhancing carbon in the landscape was a priority for the Australain Greens in the MPCCC negotiations to deliver a carbon price and we welcome the vegetation and wildlife corridors that are now the result, Senator Christine Milne, Aust Greens leader said today.
“Tony Abbott and the fossil fuel lobby who rail against charging polluters for carbon pollution are silent and turn a blind eye to all the great outcomes we are now seeing in the bush because of The Greens push for the $1b biodiversity fund and the enhanced carbon farming initiative.
“Fossil fuel polluters who are driving climate change are now paying to help wildlife adapt to climate change and farmers to be stewards.”
“Tony Abbott says he will end carbon pricing, does that mean he will abandon farmers and wildlife corridors and the $1b Biodiversity Fund or is this another addition to the $70b black hole?
Is “Turn back Wildlife” the next Abbott slogan?
• Audio file of the press conference with Greens Leader Senator Christine Milne at the Greens National Conference
http://greensmps.org.au/content/audio/christine-milne-greens-national-conference-press-conference