Treasurer Josh Frydenberg backed away from the surplus commitment at a press conference on Tuesday.
Mick Tsikas/AAP
Changes to the government’s targets in its budget update give it room to spend more.
The forecast for Australia’s economic growth in 2019-20 has been cut by 0.25%, and the projected surplus for this financial year slashed by A$2.1 billion.
The Conversation
Politics with Michelle Grattan: Mathias Cormann and Jim Chalmers on the mid-year budget update
The Conversation , CC BY 29.7 MB (download)
The figures indicate a worsening economy, but the government has sought to put a positive spin on the situation, saying the Australian economy is showing resilience.
The update has slashed growth and surplus forecasts, as the economy is buffeted by global and domestic pressures.
Lukas Coch/AAP
The projected surplus has been revised down from A$7.1 billion at budget time to $5 billion for this financial year.
Australia’s budget bottom line has been assisted by the price of iron ore, which spiked in 2019 as a result of the tailings dam spill disaster near the town of Brumadinho, Brazil, in January.
Antonio Lacerda/EPA
Charter of Budget Honesty aside, we can expect assumptions that stretch credulity so the Australian government can maintain its surplus forecast.