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(Australian Associated Press)
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 gross domestic product, according to the final budget outcome released on Tuesday.
That’s 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 says.
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 told reporters in Sydney in Tuesday.
“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 in 2017/18 was 2.9 per cent, slightly stronger than the forecast growth of about 2.75 forecast.
Mr Frydenberg said the results meant the government is on track with its plan 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 government’s first budget and the treasurer had given up on offsetting new spending measures.
Net debt had almost doubled from $175 billion in September 2013 to $342 billion in the latest figures.
Gross debt was above half-a-trillion dollars, up by $250 billion since September 2013.
“We’ve seen this story before with the Howard-Costello government baking in unaffordable, permanent income tax cuts and tax concessions and middle class welfare into the budget, only for that to be unwound by successive governments as a temporary boom dried up,” Mr Bowen said.
Structural repairs were needed such as Labor’s proposed changes to negative gearing, capital gains tax and trusts, he said.