Budget May Be In Surplus Early
Budget May Be In Surplus Early – Speculation that Treasurer Wayne Swan will hand down the Henry Tax Review on the same day as the May 11 Budget would seem unlikely if research by a leading Australian investment bank proves correct.
Macquarie Research says the Budget could be brought back to surplus by 2011-12, four years earlier than forecast by the Government, and without “punishing taxes or savage costs to spending”.
Last November’s Mid-Year Economic and Fiscal Outlook (MYEFO) forecast a $31.2 billion deficit in 2011/12.
Given this marked turnaround in the fiscal position, the report suggests that the Government wouldn’t want to distract from the presentation of the Budget in this election year with the Henry review.
Mr Swan yesterday said the tax review conducted by Treasury Secretary Ken Henry would be made public by the time the budget is delivered on May 11.
But he would not rule out it being released on the same day.
Macquarie Research senior economist Brian Redican said the economy was a lot stronger than expected than in MYEFO with “unemployment the standout factor”.
Data last week showed the jobless rate at 5.3 per cent in February, having peaked at 5.8 per cent last year.
In MYEFO, the unemployment rate was forecast to reach 6.75 per cent by mid-2010 and not fall below 5.5 per cent until 2014-15.
This means that not only is the Government having to pay less unemployment benefit, more workers are paying income taxes than previously expected.
Tags: Australian Investment, Economist, Election Year, Fiscal Outlook, Fiscal Position, Income Taxes, Investment Bank, Jobless Rate, Ken Henry, Last November, Mr Swan, Report Suggests That, Speculation, Standout, Swan, Treasurer Wayne, Treasury Secretary, Turnaround, unemployment rate, Wayne Swan
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