The Prime Minister and Treasurer released their first MYEFO update on Tuesday 15 December 2015. The mid-year economic & fiscal outlook (MYEFO) downgraded the 4-year deficit outlook by $26bn (to $108bn), delaying the projected timing of the first surplus 1 year to 20/21. The current 15/16 budget year deteriorated by a minor $2bn to $37.4bn (2.3% of GDP). The Treasurer has abandoned the previous Liberal announcement from the Federal Budget by the previous Treasurer Joe Hockey for a return to surplus by 2023-24. Instead he now pledges to get back to surplus ASAP in a patient and responsible manner.
The Treasurer announced major spending on Syrian Refugees, more for roads, new drugs on the PBS, more money on managing asylum seekers and spending their new innovation statement. This will be covered by cuts to targeting health and welfare, fine tuning aged care subsidies and child care subsidy cuts for families earning more than $250,000 pa.
Opposition leader Bill Shorten has blasted the economic management of the Liberals over the last 2 years, however with $7billion written off the budget due to falling iron ore prices and a reduction of $1.9 billion in tax receipts, no one could possibly balance the books with this kind of write down which is effectively out of their control.
If you would like further information on the MYEFO please contact us.