Australia Announces Budget Surplus For The First Time In 15 Years

Australia Announces Budget Surplus For The First Time In 15 Years by Adam Rosen last updated on May 21, 2023

For the first time ever in the last 15 years, Australia has managed to post a budget surplus. This comes at a time when Australia is benefiting from high mining profits and steady job growth.

However, experts believe this budget surplus will soon be consumed by spending in a lot of areas such as energy, health, & defence.

Jim Chalmers (Treasurer) has announced billions worth of relief in the 2nd budget. The stimulus is aimed at lowering consumer prices and power bills. In fact, it can be viewed as a helping hand offered by the RBA to the Australian public.

The thought process behind this relief package is to enable the AU population to fight against stubborn inflation. But that also means the surplus budget posted by the Australian government will soon vanish into thin air.

Providing Relief Remains The Number One Priority

According to one official, the government's main priority in this budget is to provide targeted and responsible relief to the public.

In fact, the Australian government plans to spend 82% of its extra revenue on public relief. The extra revenue was collected from high exports, wage growth, and lower unemployment in the country.

But despite the spending plans, we can't ignore the fact that Australian government projections show a budget surplus of A$4.2 billion surplus.

Just a month ago, the government was forecasting a shortfall of A$37 billion which further highlights the importance of this surplus.

If we look back, the earlier government was very close to posting a budget surplus in 2019. But at that time, the COVID-19 pandemic disturbed the finances and pushed Australia's budget into a deficit.

According to experts, the recent budget surplus is mainly due to the strong labour market in the country. At the time of writing this, the unemployment rate in Australia is at 3.5%, which is a 50-years low.

In addition, the income tax collection is at all-times high which is saving the government from paying a lot of money in welfare support.