Coalition on target to smash national debt

AUSTRALIA’S gross debt will be slashed by $23 billion within three years, Scott Morrison will announce at today’s economic update as he reveals the federal budget is on track to return to surplus by 2021.

AUSTRALIA’S gross debt will be slashed by $23 billion within three years, Scott Morrison will announce at today’s economic update as he reveals the federal budget is on track to return to surplus by 2021.

After winning Saturday’s crucial Bennelong by-election and securing a governing majority in the House of Representatives, the good news will continue for Prime Minister Malcolm Turnbull and the Treasurer when the government announces a massive paying-down of debt in the today’s midyear economic and fiscal outlook (MYEFO) — a move revealed exclusively by The Daily Telegraph yesterday.

Net debt in the next year is expected to reach 19.2 per cent of GDP — 0.6 per cent or $12 billion lower than forecast in the May Budget — while gross debt is on track to be $23 billion less in the forward estimates than the $606 billion Budget forecast.

Australian Prime Minister Malcolm Turnbull waves to supporters during a visit to the suburb of Putney with newly elected Liberal member for Bennelong, John Alexander.

In the next decade, the gross debt is estimated to be $40 billion lower than projected seven months ago.

But Australia’s debt this year is still a record-breaking $517 billion, with an interest bill of $18 billion.

Increased tax income from strong jobs growth and improved commodity prices have delivered the higher than expected revenue.

Mr Morrison was deliberately conservative with commodity price predictions and job estimates in May and his strategy has worked, enabling him to announce the improved economic outlook today.

“In this year’s half yearly update we have also reached another important milestone, ahead of schedule,” he said.

“From this financial year, 2017-18, right now, we are no longer putting the equivalent of the national grocery bill on the credit card.

The budget update is further good news for Malcolm Turnbull who held onto majority government with the securing of Bennelong.

“We are acting, as we promised, in a fiscally responsible way to reduce our debt so that we can sustainably fund the essential services like health, schools as well as infrastructure, that Australians rely on.”

Critics have argued the Turnbull government has not taken enough action to tackle expenditure, with spending rising significantly.

Today, however, Mr Morrison will say this is the first time since the Global Financial Crisis that the Australian government is not expected to need to borrow for recurrent spending. “This is a year earlier than forecast in the 2017-18 Budget.”

Labor finance spokesman Jim Chalmers said: “Even if the budget improves by that much, Turnbull and Morrison still have higher debt on their watch than any government in Australian history.”

The improved economic forecast follows strong jobs growth figures last week.

Mr Turnbull announced it was the strongest run of monthly jobs increases since 1994 and said his government was creating more than 1000 jobs a day.