SYDNEY – Australia on Friday recorded a final budget surplus of A$22.1 billion ($14.2 billion) for the year to June 2023, five times earlier estimates, as strong jobs growth and bumper mining profits helped the country post the first surplus in 15 years.
Figures from the Treasury showed the surplus was around 0.9% of gross domestic product, and the government will return 95% of revenue upgrades to the budget bottom line in a bid to avoid adding to inflation.
In its May budget, the Labor government had projected a surplus of A$4.2 billion, a huge turnaround from the pandemic-driven deficits of the two previous years.
However, the budget is projected to return to deficit this year amid intensifying spending pressures on healthcare, energy and defense. Higher interest rates and a slower global economy are set to slow the domestic labor market.
“It’s not our expectation at the moment… that there will be a second one,” Treasurer Jim Chalmers said in an interview with ABC News Breakfast.
“We know that it’s not an end in itself, but it’s a really important, much stronger foundation from which to face the uncertainties ahead, and the pressures on the budget are intensifying rather than easing.”
By banking revenue upgrades, the government lowered gross debt by A$87.2 billion and will avoid around A$12 billion in interest payments over the five years to 2026-27.
Chalmers said in July the budget surplus was likely to be a little over A$20 billion for the past financial year. — Reuters