# Budget update: MYEFO



## Jack Malarkey (Jan 11, 2016)

Summary prepared by government relations firm Barton Deakin:

Barton Deakin Brief: Mid-Year Economic and Fiscal Outlook 2019/20

16th December 2019

Overview

Today, Treasurer the Hon Josh Frydenberg MP and Minister for Finance, Senator the Hon Mathias Cormann released the official Mid-Year Economic and Fiscal Outlook (MYEFO).

MYEFO estimates that future growth levels will be slightly lower than forecast at Budget time, and Budget surpluses are also expected to be lower than forecast, with this year's surplus expected to be $5 billion.

MYEFO addressed other economic and fiscal trends, including wage growth, employment figures, household income and consumption and net debt.

Budget Surplus

The Treasurer announced that the Government's forecasted underlying cash surplus for this financial year would be revised down to $5 billion. The Treasurer stated that the downwards revisions over forward estimates were a result of domestic challenges, such as drought and bushfires, and external factors.



















Australia's Place in the Global Economy

Despite downwards revisions to the underlying cash surplus, Australia has demonstrated resilience in the face of weakening momentum in the global economy. This weakening reflects the impact of continued tensions on global trade flows and supply chains, particularly in East Asia. Uncertainty as global growth heads towards 3%, the lowest growth since the global financial crisis, has also weighed on business confidence and investment intentions.

GDP

Real GDP growth is forecast to be 21⁄4 per cent in 2019-20, which is half a percentage point less than was previously expected. Growth is expected to strengthen to 23⁄4 per cent in 2020-21. GDP growth in the first three quarters of 2019 has been stronger than it was in the second half of 2018. The labour market remains strong and domestic demand is expected to pick up over the forecast period.

Nominal GDP is forecast to grow by 31⁄4 per cent in 2019-20. Nominal GDP growth in 2020-21 has been downgraded by 11⁄2 percentage points to 21⁄4 per cent, largely reflecting the assumed decline in iron ore prices.

The housing market has made a persistent recovery over recent quarters which is expected to support domestic economic activity over coming financial years.

Wage Growth

MYEFO predicts wages growth at lower levels than forecast at Budget time, but wages are still growing at a faster rate than inflation and wage growth remains above inflation.

Employment growth has outpaced population growth and is above the OECD average, however, unemployment remains at 5.3%. This figure is 0.2% higher than the forecast unemployment rate.

Household Income and Consumption
Disposable household income has experienced its strongest growth over the past decade, which is attributed to the Government's tax cut package earlier this year.

Household consumption is forecast to increase further over forward estimates by 1.75% in 2019/20 and 2.5% in 2020/21.

Net Debt

Net debt is projected to be $392.3 billion in 2019-20 (19.5% of GDP) and to improve across the forward estimates and medium term. Net debt is then projected to decline as a share of GDP to 16% in 2022/23 and to 1.8% in 2029/30.

Gross debt as a share of GDP is also expected to decline over the forward estimates and medium term to 27.7 per cent of GDP ($556 billion) at the end of 2019-20.

Government Priorities

The Government has identified its priorities as continuing to implement its economic plan and providing funding to essential services that Australians rely on, which includes:

- Accelerating transport infrastructure projects
- Increasing support for drought affected communities and improving water infrastructure
- Ensuring equality and safety in aged care whilst awaiting the final report from the Royal
Commission
- Stepping up Australia's engagement with the Pacific

Further information

Full MYEFO Document MYEFO

Overview

Economic Outlook

Fiscal Strategy and Outlook

Debt Statement

Forecast uncertainties, sensitivities and scenarios Statement of Risks

Australian Government Budget

Financial Statements

(https://bartondeakin.com/app/uploads/2019/12/161219-MYEFO-Brief.pdf)


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## tohunt4me (Nov 23, 2015)

Jack Malarkey said:


> [Post not yet completed]
> 
> Summary prepared by government relations firm Barton Deakin:
> 
> ...


Surplus ???

Surplus !!!

Quick

Spend it & ask For More !


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## UberDriverAU (Nov 4, 2015)

tohunt4me said:


> Surplus ???
> 
> Surplus !!!
> 
> ...


Any government that's taking billions out of the economy when it's struggling has got rocks in their head. The only time they should think of running a surplus is if the economy is going great guns.


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## Jack Malarkey (Jan 11, 2016)

My extract from the Barton Deakin report inadvertently omitted a table relating to wages growth. The table is below:










(https://bartondeakin.com/app/uploads/2019/12/161219-MYEFO-Brief.pdf)


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## tohunt4me (Nov 23, 2015)

I think the " Plan" is to Bankrupt All Nations

Then INSTITUTE GLOBAL GOVERNMENT.

Where IS all of the Wealth of the World Going !?!?

Everyone is Poor !


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## UberDriverAU (Nov 4, 2015)

Jack Malarkey said:


> My extract from the Barton Deakin report inadvertently omitted a table relating to wages growth. The table is below:
> 
> View attachment 389509
> 
> ...


How do they have "actual" figures four years out? &#129300;


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## Jack Malarkey (Jan 11, 2016)

UberDriverAU said:


> How do they have "actual" figures four years out? &#129300;


They're prescient. I hope I can borrow their crystal ball for the next Melbourne Cup.

I haven't followed through to the Government's MYEFO documentation but I expect the figures are revised forecasts.


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## WestSydGuy (Jun 7, 2018)

At least google cut a deal with the ATO and chipped in a third of what they owe, $500M, should boost the gov coffers for a bit, fund a couple of flights to Hawaii... oh... never mind :biggrin:

https://mobile.abc.net.au/news/2019...x-bill-does-not-dent-alphabet-shares/11812834


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