Australia expects smaller revenue upgrade in budget due to falling commodity prices
Ships waiting to be loaded with iron ore can be seen at Port Hedland in the Pilbara region of Western Australia December 3, 2013. REUTERS/David Gray/File photo
By Alasdair Pal
SYDNEY (Reuters) – Australia will report a smaller revenue upgrade in its federal budget for the year ended June 30 than it posted the prior year due to falling commodity prices and a softening labour market, the country’s Treasurer said on Thursday.
Booming commodity prices saw major minerals exporter Australia upgrade its budget revenue by more than A$100 billion ($66.12 billion) in 2022-2023, a feat that is unlikely to be repeated this year, Treasurer Jim Chalmers said in a speech.
“The revenue upgrades will be smaller,” he said.
“In each of our first two budgets we benefited from more than A$100 billion in revenue upgrades. This year, we won’t see anything like that.
“In fact we are even looking at much less than the A$69 billion we booked in the latest mid-year budget update.”
Weaker commodity prices, in particular for major export iron ore, and rising unemployment were behind the change, said Chalmers. Australia’s jobless rate hit a two-year high in January.
Chalmers said the government was still aiming for a second consecutive budget surplus, although a greater portion of the revenue upgrades would be spent compared to last year, when roughly four-fifths was saved.
“We are still committed to banking as much as we can,” he said.
($1 = 1.5124 Australian dollars)
