Treasurer Josh Frydenberg is feeling upbeat about the local economy, calling Australia’s economic recovery ‘the best in the developed world.” Presenting the latest figures in the Mid-Year Economic Fiscal Outlook, the cash balance deficit for 2021/22 is $99.2bn, down from $106.6bn estimated in last May’s budget and a marginally better cash deficit over the forward estimates of $2.3bn. Net debt over the forward estimates also points to a lower peak in 2024/25 of $914.8bn instead of $980.6bn, representing 37.4% of GDP. The fiscal outlook revealed an increase in total tax receipts due to stronger than expected labour market, elevated commodity and asset prices than assumed in the May budget. Nominal GDP is expected to grow 6.5% and the unemployment rate is expected to fall 4.25% by 2023 June quarter.
Despite the Treasurer’s undying optimism about the economic state of the country, economists said the improvements were marginal, flagging the half-year fiscal outlook pointed to minimal new announcements at the pre-election budget in March with the government shifting into budget repair in the second half of 2022.