Treasurer Jim Chalmers flags 2023-24 surplus likely to grow beyond $9.3bn forecast in budget

Treasurer Jim Chalmers says he is expecting Australia’s surplus to grow beyond the $9.3bn forecast in the budget, with the exact figures set to drop in September.

Treasurer Jim Chalmers has flagged a larger than expected surplus for the 2023-24 budget, surpassing the projected $9.3bn determined in the federal budget in May.

While official figures will be released in September, Dr Chalmers spruiked what he believed would be a larger surplus in the “mid-teens,” which would place “downward pressure on inflation in our economy”.

“If it is around that level, that could be the biggest back-to-back surpluses on record. Already we know those two surpluses will be the first back-to-back surpluses in almost two decades and half a dozen treasurers,” he told Sky News on Sunday.

While the double surplus will be a first for the Australian economy since the 2007-08 global financial crisis, Treasury forecasts indicate a deficit of $28.3bn in 2024-25, with the figure growing from the $18.8bn projected in the December mid-year economic and fiscal outlook.

Federal Treasurer Jim Chalmers said the government was expecting a surplus in the ‘mid-teens,’ growing from the $9.3bn projected in the May budget. Picture: NewsWire/ Martin Ollman

Dr Chalmers’ comments come ahead of the June quarter inflation figures, which will be released on July 31.

Fears of another rate rise were stoked in May, after the monthly consumer price index rose to 4 per cent in May, increasing from 3.6 per cent in April.

Both figures are above the Reserve Bank’s 2 to 3 per cent target range for inflation, but the May budget forecast the economy could fall below 3 per cent by the end of the year.

The Treasurer said government spending was not the “primary determinant of prices in our economy,” and said government policies around energy and early childhood education rebates were helping to ease inflation.

“We’ll find out more about where inflation was up to in the June quarter … We expect the primary drivers of inflation in that quarter to be rent, insurance and petrol – none of those things are about government spending, but we can play a helpful and meaningful role.”

Originally published as Treasurer Jim Chalmers flags 2023-24 surplus likely to grow beyond $9.3bn forecast in budget