Good morning, Johnny. What's driving the higher budget surplus? Yes. Good morning, Sarah and Carl. And, Carl, while you've been sunning up in Europe getting a nice tan and some well earned rest, jim Chalmers has pulled a rabbit out of the hat.
He says we going to get a significantly higher surplus than the 4 billion forecast only seven weeks ago. We're only three days out from the end of the financial year. It may be pushing up closer towards 10 billion.
At a guess. We don't know the final figure yet, but this is all being driven by more people in jobs, low unemployment, so people paying more taxes, but also wage inflation, putting people into higher tax brackets as well, and commodity exports as well.
Going pretty well on iron or delivering more revenue, too. So it's going to be pretty short lived, then. Has some dark clouds on the horizon. Yeah. Economically, the treasure is warning we're going to have a significant slowdown in the economy, obviously, because of the global economy events, but also just those sharp rising interest rates as well.
Twelve interest rate rises so far. We're probably going to get a 13th in the next month or two as well, I would imagine. But the funny thing is, actually, the budget could keep performing pretty well in the short term at least.
I reckon we're going to get a second surplus in the next financial year as well. There you go. Exclusive, but we all suffer. Thank you, John's. Going to hurt. Yeah, it is going to hurt. Fears of another RBA rate hike.
Loom economists worry we're edging closer and closer to plunging into recession. However, company profits and a job boom have driven our budget surplus above the $4.2 billion mark. Joining us to discuss today's headlines is Queensland Senator Matt Canavan and political editor at the Australian Financial Review, Phil Corey.
Good to see you both. Thanks for your company this morning, matt back in the black, but this isn't good news for everyone. While rising inflation looks hey. Yeah, I reckon most Australian families, Sarah, would wish they were back in the black, too.
Their budgets aren't looking quite as healthy as Jim Chalmers. And this really is a budget built on the back of luck luck of high commodity prices, record coal, iron ore prices. That's what's driving this surplus.
Because in terms of decisions that Jim Chalmers and the labor government have made, they've added to spending. They've massively poured fuel on the inflation fly that's ripping apart families budgets.
In fact, the budget just a few weeks ago was the biggest spending, non COVID spending budget since the global financial crisis. And then they spent another $2 billion since, just in the month since, in a hasty rush together, put to housing plans.
So, look, they've got to control spending, we've got to try and get family budgets under control, not just the government's budget. And the way to do that is actually put some discipline about how much this government is spending.
Yeah, well, of course, the Treasurer is warning that this isn't all peaches and cream. I mean, Phil, economists are also concerned that there's a 50 50 chance of a recession this year. Yeah, that's right, Sarah.
I mean, it's good to start, it's good to have a big surplus. Now, given what's what's around the corner in terms of a possible recession, it's definitely going to be a slowdown at a minimum. So to have the budget in a strong position before we go into that helps.
And sort of matt said it's one good thing to have a surplus, but there'll be a temptation to spend some of it and that they'll have to resist that because that will make the inflation problem worse. But look, labor has been very proud of this surplus, first one we've had in 15 years.
To them, politically, it's important to them because they don't have the credentials of economic managers that the other mob has. So they'll sort of for them, this is important politically, but I don't think they're getting carried away with how easy it's going to be economically over the next few months.
Australia's budget surplus is expected to be even bigger than originally forecast, although some economists are urging caution. Federal politics reporter Reese Alessandro has the details. Reese, what's behind the better bottom line?
Jane. The surplus for this financial year will be significantly higher than that $4.2 billion forecast, thanks to tax revenue from the jobs boom and high commodity prices on the things Australia SLS to the world doing away with the extreme caution he displayed at the May budget.
The treasurer will confirm in a speech today the nation's coffers will be in the black for the first time since the global financial crisis. But while a healthy budget bottom line is certainly a good thing, the challenges ahead are also likely going to be more significant than predicted.
On the downside, stubbornly high inflation, deteriorating global conditions, success rate hikes and flatlining productivity are expected to trigger a sharp economic slowdown in the year ahead. So really, Jane, a tale of two sides this morning as Jim Chalmer's second budget begins to materialize.
Okay, reese. Thank you.
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