From Craig James at Comsec noting the monthly Finance update:
Budget deficit: In the year to December, the budget deficit stood at $26,957 million (around 1.7 per cent of GDP), the lowest calendar year deficit in five years. The government projects a deficit of $46,989 million in 2013/14.
What do the figures show?
• The underlying budget deficit for the twelve months to December (2013 year) stood at $26,957 million, the lowest calendar year deficit in five years. In December 2013 the monthly surplus was $7,395 million – the biggest surplus for a December month since 2010.
• Smoothed revenues (year to December) were up 3.7 per cent on a year ago, down on the 5.6 per cent average annual growth over the past year. Smoothed expenses grew by 2.7 per cent over the same period, in line with the 3.0 per cent average annual growth over the past year.
• The Government noted: “The underlying cash balance for the year to 31 December 2013 was a deficit of $30,376 million, compared to the Mid-Year Economic and Fiscal Outlook (MYEFO) profile deficit of $28,870 million. The difference of $1,506 million relates to higher than expected cash payments, partially offset by higher than expected cash receipts excluding net Future Fund earnings.”
Despite Mr James’ enthusiasm, the bit that matters most is that the Budget has deteriorated $1.5 billion in two months.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
