Mid-Year Economic and Fiscal Outlook (MYEFO)

yep, not stuff you'd hear on "our" ABC

The Goodness just keeps on coming as the TRUE assessment of our economy is released.


Strength and security in Conservative unity



MYEFO Statement – Keeping our Economy Strong
 DECEMBER 16, 2019 11:46 AM AEDT

Australians can be confident about their economic future. We have the first current account surplus in 40 years, the lowest welfare dependency in 30 years, the biggest tax cuts in 20 years, and the budget is in balance for the first time in 11 years.

More than 1.4 million new jobs have been created since we came to Government; we are investing record amounts in schools, hospitals, aged care and disability support; household disposable incomes have seen their fastest increase in a decade off the back of the tax cuts and Australia has maintained its AAA credit rating.

The Australian economy’s remarkable resilience comes at a time of significant global and domestic headwinds.

Our devastating drought has already taken a quarter of a percentage point off GDP growth and reduced farm output by around 18 per cent over the last two years.

Global trade tensions have weighed heavily on consumer and business sentiment with forecasts for global economic growth and that of our major trading partners downgraded in today’s MYEFO.

Despite these challenges, MYEFO demonstrates that the Australian economy continues to grow with the Budget returning to surplus for the first time in 12 years.

There are three key takeout’s from today’s MYEFO.

First, the Government is living within its means, paying down Labor’s debt without increasing taxes.

Surpluses over the forward estimates total $23.5 billion and build to 1 per cent of GDP by 2026-27. With a forecast surplus of $5 billion in 2019-20, it is a $53.5 billion turnaround on the deficit we inherited upon coming to Government.

With gross debt having peaked in 2017-18 and net debt falling over the forward estimates, the nation’s interest bill on its debt burden falls from $19 billion last year to $14.5 billion in 2022-23.

Over the forward estimates in cumulative terms, this amounts to $13.5 billion that no longer needs to be spent on interest payments.

This stronger fiscal position is achieved with a tax to GDP ratio of 23.1 per cent this year that falls to 22.9 per cent at the end of the forwards.

Real growth in spending is 1.3 per cent per annum on average over the forwards, reflecting more Australians in work.

Spending as a proportion of GDP is at 24.5 per cent this year, below the 30 year average.

Our pathway to surplus has been steady and consistent, not relying upon overly optimistic commodity prices.

In MYEFO, we have kept the iron ore price assumption at US$55 per tonne by the end of the June quarter 2020, despite the current spot price being around US$85 a tonne.

Metallurgical and thermal coal price assumptions have both been reduced to US$134 and US$64 respectively, reflecting recent price movements.

This is impacting on nominal GDP growth which is forecast to be 3¼ per cent in 2019-20 and 2¼ per cent in 2020-21. This impacts on revenue forecasts which have been revised in MYEFO.



Second, MYEFO demonstrates that the Australian economy continues to grow. This year growth is forecast to be 2¼ per cent, lifting to 2¾ per cent next year.

Next year the Australian economy is expected to grow faster than any nation in the G7, and faster than the OECD average of 1.6 per cent.

Growth is being driven by a combination of factors including public final demand, household consumption, business investment and exports.

Public final demand which covers consumption and investment, including NDIS and transport infrastructure spending, is forecast to grow to 4¾ per cent this year which is up from budget, and mining investment is forecast to grow for the first time in seven years.

Household consumption, while lower than budget, is still forecast to grow by 1¾ per cent in 2019-20. With the recent national accounts showing household disposable income had its fastest rate of growth in a decade off the back of the Government’s tax cuts.

Export growth remains strong, supported by new free trade agreements and increased demand for our services exports which is forecast to increase 5½ per cent in 2019-20.

The labour market remains strong with employment growth forecast to be 1¾ per cent in 2019-20 and the participation rate remaining around historic highs of 66 per cent, upgraded from 65½ per cent at budget.

While wage growth and inflation have both been revised downwards, wages are forecast to continue to increase at 2½ per cent this year and next, which is above the forecast for the rate of inflation.



Third, with the Government’s economic plan delivering continued economic growth and a stronger budget position, MYEFO demonstrates we have the capacity and flexibility to invest more in the areas where we need it most.

MYEFO confirms that since the budget, we have made policy decisions to provide an additional $8.3 billion over forward estimates, including $2.4 billion in 2019-20.

This includes $4.2 billion in accelerated infrastructure projects over the forward estimates, which is part of our $100 billion 10 year infrastructure pipeline.

There is $2.9 billion of work brought forward on projects including the north east link, north south corridor, Tonkin, Bass, Bruce and Princes highways, and $1.3 billion in new projects.

There is additional funding for drought support including further investments in the Drought Communities Support Initiative with $300 million to support eligible councils to complete capital works, $138 million for roads to recovery for 128 local government areas impacted by drought, and additional funding for income support, financial counselling and mental health services.

The budget update also includes $624 million in additional funding for aged care including half a billion dollars for 10,000 home care packages, $25 million to improve medication management to reduce the use of chemical constraints in aged care, and $10 million for dementia training for aged care workers.

As we go forward, we will continue to maintain a disciplined and responsible approach to managing the nation’s finances.

With the budget back under control, our fiscal strategy now focuses on paying down Labor’s debt with sustainable surpluses over the cycle, keeping taxes low and under our self-imposed cap and targeting spending to boost productivity, workforce participation and guaranteeing the essential services that people need and rely upon.

In our 29th consecutive year of economic growth, Australians can rightly be confident about their economic future.

https://www.miragenews.com/myefo-statement-keeping-our-economy-strong/

A skinny surplus is better than none.
Remember all those Swan surpluses that never happened...  ever...

Thank you for your contribution, Patriot. Much appreciated.

The Budget Surplus is now $5 billion just announced by 2GB. And give THANKS again that the Greeny controlled Labor Parry did not get in as the garbage from Labor Chalmers indicates.





Treasurer Josh Frydenberg given stage to update economic state of play
Samantha Maiden 10:04pm, Dec 15, 2019 Updated: 11:39pm, Dec 15


Treasurer Josh Frydenberg will again take the spotlight to update his budget from April. Photo: AAP

Treasurer Josh Frydenberg will defy Labor’s calls to bring forward personal income tax cuts to stimulate the economy in Monday’s mid-year budget update.

As the government pledges the first surplus in a decade will survive a massive revenue writedown, the Morrison government will outline an update to the budget position that is expected to include gloomier predictions on wage growth for workers than previously forecast.

It will also update the budget figures on new spending on aged care and the drought, which has been announced since the election.

The Australian newspaper reported on Sunday night the government will confirm a revenue writedown of $30 billion that will be offset by savings and not delay the projected surplus this year.

The Treasurer announced a forecast surplus in the April 2 budget, which is expected to be confirmed this financial year.

“It’s not official until the final budget outcome next year in September,” Deloitte Access Economics’ Chris Richardson said.

“We get data monthly and that seems to still be on track.”

Labor’s treasury spokesman Jim Chalmers said workers were worse off by up to $2000 a year as a result of lower-than-expected wage growth.

“The mid-year update will be a humiliating admission that the government has got the economy wrong at every turn,” Dr Chalmers said.

“A humiliating admission that growth is slower, wages are weaker, and more than half the debt that has accumulated is Liberal debt.

“It will be a signed confession that, after promising to make the economy even stronger at the election, the Morrison government has made the economy even weaker.”

Dr Chalmers said the average full-time worker was earning $2200 less than the government said they would be.

“What this shows is that no matter how hard Australians are working, they just can’t seem to get ahead,” he said.

“Australians are working really hard, but their wages are stagnant.

“They can’t keep up with the skyrocketing costs of childcare, electricity and private health insurance.

“Ordinary Australians are copping it in the neck under this government, which has mismanaged the economy at every single turn.

“Wages are the best example of that.

“The mid-year update is their opportunity to come up with a comprehensive plan to turn around an economy that has deteriorated substantially since they took over.”

But Finance Minister Mathias Cormann rejected suggestions that workers’ wages were not growing fast enough.

“Wages are not stagnant. That is just inaccurate Labor Party political rhetoric,” Senator Cormann said.

“Real wages are growing more strongly than when Labor lost government. Wages continue to grow faster than inflation.

“Over the last quarter according to the National Accounts data, the growth in disposable income for people across Australia was the highest in more than a decade.”

The Treasurer has previously flagged he’s in talks with big business to provide further tax relief to help create jobs.

This year’s budget on April 2 announced an extension of the instant asset write-off but only for companies with a turnover of less than $50 million a year.

Reflecting on the British election result, Dr Chalmers said it was self-evident that Labor in Australia and overseas in the UK didn’t build a big enough constituency for change.

“The lesson for centre-left parties is that you don’t beat populism of the right with populism of the left,” Dr Chalmers said.

“I’ve been saying that for some time now. You can’t win an election just by preaching to your base.

“You need to build much bigger constituencies of support and that begins with a bedrock of economic credibility.”

He also accused Prime Minister Scott Morrison of failing to take real action on climate change.

“This debate has become unnecessarily polarised and Scott Morrison has fed that because he’s always looking for an excuse not to do anything on climate change,” he said.

“He’s always looking for a distraction from the fact that we’ve got emissions rising.

“He’s always looking for a political wedge and a scare campaign. But that doesn’t reflect where the Australian people are at.

“What the Australian people want is for us to listen respectfully to the experts and to the science.

“They want genuine action taken on climate change in a way that is respectful of people’s lives and livelihoods in places like regional Queensland.”

https://thenewdaily.com.au/news/national/2019/12/15/treasurer-josh-frydenberg-myefo/

ScoMo steers a delicate course for an up tick in 2020 now that Trump and China have reached an agreement on some of their trade war.

All Australians should go down on their knees and give THANKS to GOD that the Greeny controlled Labor Party did not get in and reduce Australia to dust and of course RESTART the BOATS!!!!!!




Vital signs: Australia’s wafer-thin surplus rests on a mine disaster in Brazil
Richard Holden 10:06pm, Dec 15, 2019 Updated: 38m ago


An aerial shot of the Córrego do Feijão mine disaster.. The collapse of the Brumadinho dam at the Córrego do Feijão iron ore mine has helped Australia's budget. Photo: Getty


On Monday the Australian government will release the Mid-Year Economic and Fiscal Outlook (MYEFO).

This will – as required by the Charter of Budget Honesty – provide an update on the key assumptions made in this year’s budget, and track the implications of decisions made since the budget for the projected surplus.

There are two things you can count on about MYEFO.

First, the government will have to pare back its forecasts for economic growth, wages growth and employment growth.

Second, no matter what the economic reality is, the forecast for a budget surplus will remain.

The government has made economic management – as measured by the rather dubious criterion of budget balance – the central plank of its electoral strategy.

As the Australian National University’s 2019 Australian Election Study revealed, voters preferred the government’s economic policies to Labor’s by a wide margin (47 per cent to 21 per cent, with 17 per cent thinking there was no difference).

On the management of government debt, the margin was 44 per cent to 18 per cent.

But the economy isn’t doing very well.

GDP annual growth is 1.7 per cent, not the 2.75 per cent forecast in the budget.

The unemployment rate is 5.3 per cent, compared to the forecast of 5.0 per cent. Wage growth is 2.2 per cent, not the 2.75 per cent forecast.

Iron ore supplements
The forecast budget surplus for the fiscal year to June 2020 will be made to hang together, thanks to a higher-than-forecast iron ore price.

That price, which determines the dollar value of Australia’s biggest export and hence the tax revenue it generates, is not reflected in the GDP figure, which only takes into account volumes.

The iron-ore price is now $US92.50 ($134.50) a tonne.

The budget assumed the average price would be $US88 for the 2020 budget year, thanks to a reduction in the international supply of iron ore caused by a tailings dam bursting in January at the Córrego do Feijão mine near the town of Brumadinho in south-eastern Brazil.

Read on here

https://thenewdaily.com.au/finance/news-federal-budget/2019/12/15/myefo-budget-iron-ore/