14 May 2014

2014-15 Australian Budget – heading back to surplus

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After a 2013-14 deficit of $49.9bn, the budget deficit for 2014-15 is now projected to be $30bn, down from $34bn in the Mid-Year Economic Fiscal Outlook (MYEFO).

For 2015-16 the deficit is projected to be $17bn (from $24bn in MYEFO) and a surplus is now projected for 2019-20.

  • Fiscal tightening includes welfare cuts, public sector rationalisation and tax hikes, but with some offset coming from increased infrastructure spending.
  • The fiscal cutbacks are modest near term and only really start to impact from 2016-17. As a result, there is unlikely to be much economic impact in the year ahead.
  • The impact on the share market is likely to be minimal

Please click the following link to read the full article by Dr Shane Oliver, Head of Investment Strategy and Chief Economist,  AMP Capital:  2014-15 Aust Budget – heading back to surplus

The author is an employee of Verante Financial Planning in Castle Hill, Corporate Authorised Representative of Magnitude Group Limited, Licence No 221557, Magnitude Group Limited ABN 54 086 266 202.

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