Australia Posts Its First Budget Surplus In 15 Years As Tax Revenues Rise

Australia on Friday recorded a final budget surplus of USD 14.2 billion for the year to June 2023, five times earlier estimates, as strong jobs growth and bumper mining profits helped the country post the first surplus in 15 years.

Figures from the Treasury showed the surplus was around 0.9 per cent of gross domestic product and the government will return 95 per cent of revenue upgrades to the budget bottom line in a bid to avoid adding to inflation.

In its May budget, the Labor government had projected a surplus of USD 2.7 billion, a huge turnaround from the pandemic-driven deficits of the two previous years.

However, the budget is projected to return to deficit this year amid intensifying spending pressures on healthcare, energy and defence. Higher interest rates and a slower global economy are set to slow the domestic labour market.

"It's not our expectation at the moment... that there will be a second one," Treasurer Jim Chalmers said in an interview with ABC News Breakfast.

"We know that it's not an end in itself, but it's a really important, much stronger foundation from which to face the uncertainties ahead, and the pressures on the budget are intensifying rather than easing."

By banking revenue upgrades, the government lowered gross debt by USD 56.22 billion and will avoid around USD 7.7 billion in interest payments over the five years to 2026-27.

Chalmers said in July the budget surplus was likely to be a little over USD 12.9 billion for the past financial year.