Slowing global economy means smaller increase in Australian budget revenue

In Global Shorts
06 5 月, 2024


The government said on Sunday that a weakening global economy and a slowdown at home were among the reasons Australia reported a smaller increase in federal budget revenue for the year to June 30 than in recent years. The Labor government is expected to report a budget surplus on May 14, although it said in March that revenue growth would be smaller than a year earlier due to lower commodity prices and a weaker labor market. On Sunday, it said the tax revenue hikes in the budget, which excludes levies from the goods and services tax, are expected to be more than A$100 billion ($66.08 billion) higher than the average hike of A$129 billion in the past three budgets.
The expected results are due to a weakening global economy, a slowdown in the domestic economy, a weak labor market and falling commodity prices, the report said. “We are realistic about the challenges facing the economy and budget, including that the kind of large-scale revenue upgrade we saw in the recent budget update will not continue,” Finance Minister Jim Chalmers said in a statement. Chalmers has previously cited weak commodity prices, particularly for key export iron ore, and rising unemployment as key drivers of the change. Australia’s unemployment rate reached 4.1% in January, a two-year high. In April, he warned that events in the Middle East had heightened concerns about the global economy and would impact the government’s budget in May.