Government sticks to 2020-21 surplus projection

In his speech to the House of Representatives tonight, Treasurer Scott Morrison announced that the government expects that the federal budget will return a $7.4 billion surplus in 2020-21 – a projection that is in line with that offered in the 2016-17 budget.

“I can confirm tonight that the budget is projected to return to balance in 2020-21 and remain in surplus over the medium-term,” Mr Morrison said.

“The underlying cash balance will improve from a forecast deficit of $29.4 billion in 2017-18 to a projected surplus of $7.4 billion in 2020–21.

“Growth in payments has been restricted to less than 2.0 per cent per year.”

The projections come despite the government deciding to jettison $13 billion in savings measures embarked upon by the Coalition government under the previous leadership of former prime minister Tony Abbott and treasurer Joe Hockey.

The government also announced its intention to cease reliance on debt as a crutch for welfare, health and education expenditure, instead initiating a $21 billion tax hike over the next four years, to be funded in significant part by a $6.2 billion levy on the liabilities of CBA, ANZ, NAB, Westpac and Macquarie.

“Around three quarters of the increase in our debt since 2007-08 has been driven by welfare, health and education spending,” the Treasurer said.

“To respect future taxpayers, this everyday spending should be funded from the first dollar we receive in taxes, not debt.

“The budget papers show, after you take into account the net operating balance, infrastructure grants and non-cash accounting provisions, the government will no longer be borrowing to pay for our everyday expenses from 2018-19.”

More broadly, Mr Morrison said the government must guarantee “essential services” in order to reduce cost of living pressures on Australians.