MYEFO Provides a Better than Expected Budget Bottom-line for Australia: CCIQ
The Chamber of Commerce and Industry Queensland has today welcomed the improvement in the federal budget bottom line, announced by Treasurer, Josh Frydenberg in today’s Mid-year Economic and Fiscal Outlook (MYEFO).
A stronger export performance and company tax take has helped the Federal Government outline a better than expected series of budget surpluses over the forward estimates with the previously forecast deficit for the current year halved to $5.2 billion.
CCIQ Chief Economist, Dr Marcus Smith notes that company tax receipts of $95.2 billion are $3 billion above the previous estimate at $92 billion representing an obvious positive for the wider economy.
“Australia’s stronger terms of trade amidst a series of mixed economic data over the last six months has helped boost Treasury coffers but ongoing reform will be key over the near to medium term.
“The welcome focus by the Commonwealth Government more recently on developing a more accommodating corporate tax setting for smaller and medium sized business will help the broader economy; however, it is incumbent upon the Federal Government to ensure spending initiatives flagged today are aimed squarely at boosting productivity which, in turn, spurs private investment.
“More broadly, the update of the economic outlook indeed seems to be forecasting goldilocks economic conditions going forward – full employment with unemployment running at 5%, real economic growth at 3%, as well as 2.5% inflation sitting enthusiastically in the middle of the RBA’s core inflation target of 2-3% over the medium term.
“The outlook also indicates that the government expect wage growth to begin to outpace consumer inflation during this year,” Dr Smith said.
CCIQ welcomes initiatives around the allocation of funds for vocational training as well as changes to the seasonal workers programs.