NATION Repairs reduce Budget deficit

THE Government has recorded its lowest federal Budget deficit in four years after tax revenues were billions of dollars higher and spending significantly lower than expected.

Treasurer Scott Morrison said the final result of last year’s Budget was $ 4.4 billion better than expected, with economic growth and stronger job figures resulting in higher company profits, in turn pushing GST revenues higher.

Figures yesterday showed spending on the National Disability Insurance Scheme and on the Pharmaceutical Benefits Scheme were almost $ 2 billion less than expected, leaving the nation’s finances in their best state in years.

“What this shows is that the Government has been keeping expenditure under control,” Mr Morrison said.

“We have had to deal with changes to what has happened on revenue but all along the line we have been holding firm to keeping expenditure under control.

“That is one of the key reasons why Australia to date has been able to maintain our credit rating because we have been transparent about this process.”

CommSec chief economist Craig James seized on the figures to call for “much- needed tax reform”.

“A combination of firmer economic growth, and thus higher revenues, together with spending restraint have resulted in a deficit almost 12 per cent smaller than that estimated at the May Budget,” Mr James said.

“With the Budget in repair mode, all sides of politics need to switch their attention to tax reform. This will ensure that improvements in the Budget bottom line extend into the future – even with our ageing population – without the need for painful spending cuts.”

The Government collected $ 2.1 billion more than expected, including $ 590 million in company tax and $ 569 million in GST, the new figures show.

It also saved $ 364 million of money to be paid to state governments because of delays to infrastructure projects and $ 256 million because of fewer asylum seekers.

Labor treasury spokesman Chris Bowen said the improvement was “expected and minor”.

“After the release of today’s numbers we still have a Budget in substantially worse condition than that inherited by the Abbott- Turnbull government,” Mr Bowen said.

“Malcolm Turnbull, Scott Morrison and Mathias Cormann expect a pat on the back for a minor improvement in the Budget which is more about good luck than good policy.”