Treasurer talks up big drop in deficit

THE Federal Government has delivered the smallest budget deficit in a decade, on the back of a bigger tax take and growing economy.

The deficit in 2017-18 was $10.1 billion in the year, or 0.6 per cent of GDP, according to the final budget outcome released on Tuesday. It is a $19.3 billion improvement on the deficit originally estimated for the period.

Stronger- than- expected economic growth and more Australians in work contributed to the impressive improvement, Treasurer Josh Frydenberg said.

The amount of money coming in was $13.4 billion higher than expected, while total spending was $6.9 billion less than forecast, with the Future Fund earnings up $1.1 billion in net terms.

“That’s the result of a strong economy,” Mr Frydenberg said yesterday. “We are seeing more people in jobs than ever before, and that’s more senior Australians, more women, more younger people.

“We are seeing across the economy good growth, and in ’17-18 that’s been reflected in these better numbers.”

Superannuation fund taxes and higher fuel and tobacco excise receipts also boosted the coffers.

Real economic growth was 2.9 per cent, up on the forecast growth of about 2.75 per cent.

Mr Frydenberg said the results meant the Government was on track to bring the budget back to balance in 2019-20.

Shadow treasurer Chris Bowen said the deficit was almost four times worse than forecast in the Coalition’s first budget and the Treasurer had given up on offsetting new spending measures.