Australian budget to show first return to surplus since 2007
Australia’s government will unveil its budget for 2019-20 today.
With an election likely to be called for May 11, this year’s budget is of particular importance for the ruling Coalition, which is trailing opinion polling by 2 percentage points.
Treasurer Josh Frydenberg is expected to announce a fiscal surplus today, the country’s first since 2007. Prime Minister Scott Morrison will be able to use the surplus to promote his party’s responsible economic management and contrast against the opposition Labor party’s record of turning a $20 billion surplus into a deficit the last time it came into power in 2007. A surplus will also allow the Coalition to spend, with some $9 billion expected in tax cuts and around $600 million in extra funding for security agencies.
While today’s budget should provide a boost to the Coalition, it remains unlikely that Mr Morrison’s party will be re-elected come May. Still, with Australia’s economy slowing down—growth was 2.3% last year and just 0.2% in the last quarter—the pressure will be on for Labor to maintain the surplus if it comes to power in May, lest it grant the Coalition a powerful weapon in future campaigns.
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