Smaller Surplus for Australia as Jobless Rate Remains Higher for Longer in Latest MYEFO: CCIQ
The Chamber of Commerce and Industry Queensland has today urged the Federal Government to support demand in the economy and be prepared to adjust to a subdued 2020 following the release of the Mid-year Economic and Fiscal Outlook (MYEFO) in Canberra today.
A retracement in individual and company tax receipts coupled with a fall in commodity prices has seen downward revisions in previously forecast surpluses over the forward estimates.
The latest MYEFO release mirrors the subdued outlook for the national economy according to the latest Suncorp-CCIQ Pulse survey.
CCIQ Chief Economist, Dr Marcus Smith said the surplus of $5 billion for the 2019/20 year observes treasury forecasts for GDP growth falling from 2.75% to 2.25% over the coming year with the near term challenge for Federal and State governments in ensuring that there is not a further deterioration in the domestic economy.
“Australia’s stronger terms of trade have essentially helped mask a weakening employment picture and general business conditions over the last 12 months.
“The challenges facing the economy are many and varied, where constraints around compliance, over-regulation and a clearly bureaucratic approach to approval processes are hampering productivity.
“The resources and agricultural industries have effectively saved Treasury Departments across the nation; however, the economy is now confronting weaker commodity prices in both coal and iron ore as well as an impending contraction in activity from a drought-stricken agricultural sector,” Dr Smith said.
CCIQ notes that the forecast for unemployment across suggest the jobless rate is expected to remain elevated at 5.25% through to 2021.