Australia government sees bigger budget surpluses ahead

SYDNEY (Reuters) – Australia’s conservative government on Monday forecast its budget deficit for the fiscal year to June 2019 would shrink to A$5.2 billion, from the A$14.5 billion projected back in May.

The Liberal National government of Prime Minister Scott Morrison touted the improved numbers as evidence of its economic competence ahead of an election next year. The coalition is trailing badly in opinion polls after ousting former Prime Minister Malcolm Turnbull in a party coup in August.

In his half-year fiscal outlook, Treasurer Josh Frydenberg reiterated the budget would return to surplus by 2019/20, ending more than a decade of deficits.

He projected a surplus of about A$4.1 billion for the year to June 2020, up from the May budget estimate of A$2.2 billion. Over the four-year forward estimates, the cumulative surplus was forecast to be twice the original estimate at around A$30 billion.

A combination of stronger job creation, lower unemployment payments and higher earnings from commodity exports has helped offset weakness in wages and consumer spending.

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