Disclosure Statement: Durand Financial Services Pty Ltd and its advisers are authorised representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306. General Advice Warning: The information contained within this website does not consider your personal circumstances and is of a general nature only. You should not act on it without first obtaining professional financial advice specific to your circumstances.
Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)
Scott Morrison has reminded Australians of his economic credentials, saying he was the treasurer that brought the budget back into balance by increasing employment.
“There is no great secret to this,” the prime minister told reporters in Sydney on Monday as part of what is seen as an unofficial election campaign.
“You get people off welfare and you get them into a job. They go from taking a payment to paying taxes.”
But budget deficits have since ballooned to record levels under his prime ministership, recording a $134 billion shortfall in 2020/21, while a $106.6 billion deficit is forecast for 2021/22.
Finance Minister Simon Birmingham says this was overwhelmingly due to the revenue hit resulting from COVID-19 lockdowns and restrictions, and spending on health measures and economic supports.
But Senator Birmingham ruled out raising taxes to improve the budget bottom line, saying it would be counterproductive to growing the economy.
“Our low tax approach is not only fuelling Australia’s successful economic recovery, but it is also leading to improvements to our budget position,” Senator Birmingham told an Australian Financial Review conference on Monday.
“With more Australians in work and less on welfare we can make significant indents in that budget position quite quickly.”
The government’s financial statement for October released on Monday shows the underlying budget deficit for the 2021/22 financial year running at $43.9 billion, $7.8 billion smaller than expected after four months.
Receipts were $20.2 billion higher than expected at that stage of the year and were only partly offset by payments being $12.4 billion above forecast.
The deficit for the full financial year was forecast at $106.6 billion in the May budget.
Senator Birmingham said this was part of a trend that saw the final budget outcome for the 2020/21 financial year – released in September – being $80 billion smaller than forecast in the delayed October 2020 budget.
It was also a $27 billion improvement on expectations in the May budget.
“We certainly won’t be looking at ways to increase taxes on businesses or households in the future, as we see that as being very much a counterproductive thing that will only dampen confidence and hurt growth,” Senator Birmingham said.
He said the government was backing lower taxes as an essential way to drive confidence and investment.
Senator Birmingham and Treasurer Josh Frydenberg will hand down the mid-year budget review on December 16.
Opposition Leader Anthony Albanese noted Mr Frydenberg began his budget speech last year by wanting to go back to how Australia was before the pandemic.
“I think that Australians can aspire to better,” he told reporters on the Central Coast of NSW.
“We should be ambitious for our country. I want to lead a government that’s as optimistic, as positive, as determined, as hopeful as the Australian people are themselves.”
But the prime minister took aim at Mr Albanese unveiling policies to provide “free” services such as TAFE.
“Whenever Labor tells you something is going to be free, I guarantee you, you will end up paying for it, every single time,” Mr Morrison said.