The federal budget has posted a $50 billion improvement, but treasurer Jim Chalmers warns that this is being driven by temporary factors.
Pending the final 2021/22 budget results to be released next week, Dr. Chalmers that public finances looked better than expected.
“We have booked a substantial but temporary tax increase,” said Dr. Chalmers Tuesday.
Of the $50 billion improvement since the former government’s March budget, $28 billion came from higher-than-expected revenues, while about $20 billion came from payments that were lower than forecast.
dr. Chalmers said the budget reversal was driven by higher commodity prices. But those prices began to fall — iron ore prices, for example, fell about 20 percent from their June peak, and coking coal prices fell 25 percent.
COVID support payments to businesses were also lower than expected.
dr. Chalmers said there were also savings of billions of dollars in promises made under the coalition that had not been kept. and pandemic-related supply chain issues.
“The large payments under expenses are all related to delays in COVID-related spending, including the purchase of vaccines and personal protective equipment, also delays in infrastructure spending due to supply chain disruptions and industrial constraints, as well as lower payments for health care and social security. . ,” he said.
The federal government will announce its formal final budget result next Wednesday.
“But we wanted to give you an idea, because much of the temporary improvement we saw in 2021-22 is now becoming a problem for this government to solve in 22-2023 and beyond – because of the overpromise and under-delivery of many of these funding that will be pushed into the next few years,” said Dr. Chalmers.