‘Dramatic improvement in revenue’ could deliver surplus by 2019-2020
WORKERS earning up to $87k will be offered immediate tax relief in Tuesday’s Budget amid speculation the Government could announce a shock early return to surplus.
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THE federal Budget could be on track to return to surplus sooner than expected.
Finance Minister Mathias Cormann said the Budget would return to surplus but said “the specific trajectory will be revealed in the Budget”.
His comments have fuelled speculation the government may announce a shock early return to surplus a year ahead of schedule in 2019-20.
“We are on a believable track back to surplus,” Senator Cormann said in Canberra on Saturday.
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Senior ministers told the Sunday Herald Sun that a dramatic improvement in revenue meant the government had been given the option to revise its forecast and could potentially deliver a surplus of $7 to $10 billion by 2019-20.
If achieved, it would be the first surplus since 2007-2008, before the global financial crisis struck.
The strong cashflow is consistent with an economic analysis by Deloitte Access Economics, released late last month, which predicted the Budget would be $7 billion stronger than forecast in December due to strong company tax income and solid commodity prices.
But Deloitte forecaster Chris Richardson said an early surplus was unlikely because the Coalition needed much of its windfall to deliver promised income tax cuts.
Mr Richardson said it would be a “magnificent” effort if the government managed to deliver an early surplus, tax cuts and abolish the Medicare levy.
“I didn’t think they could get the trifecta,” he said.
But Mr Richardson warned the government against making any impulsive decisions with its sudden cash boost.
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