Australia's budget deficit widens beyond expectations, predicts Deloitte
- Deloitte Access Economics has estimated the Australian government's deficit at $33.5 billion for the 2024 financial year, which is significantly higher than initial forecasts.
- The increase in deficit is attributed to various factors, including a stagnant economy and lower tax revenues from companies.
- This report underscores the urgent need for a more sustainable fiscal strategy to address the troubling economic situation.
In a recent report, Deloitte Access Economics has warned that Australia's federal budget will reflect a significant deficit of $33.5 billion for the current financial year, surpassing earlier predictions made by Treasurer Jim Chalmers in May, which estimated a deficit of $28.3 billion. This warning is attributed to several adverse factors, including a flat economy, disappointing company tax revenues, increasing spending demands, and instability in overseas economies, particularly China. Deloitte highlighted that the budget deficit, if accurate, would demonstrate the largest nominal contraction in the underlying cash balance in Australia’s history, excluding the fiscal challenge posed by the pandemic in 2019-2020. The report concludes that without comprehensive fiscal strategies and reforms, the outlook for recovery appears bleak, with little indication that the situation will improve in the near future.