2019.09.1901:04:00UTC+00Australia's Budget Returns To Balance For First Time Since 2008, Says Treasurer

Australia's budget returned to balance in the 2018-19 financial year for the first time since 2007-08, Federal Treasurer Josh Frydenberg said Thursday.

According to the Final Budget Outcome for the 2018-19 financial year, the budget deficit was A$13.8 billion better than estimated at the time of the 2018-19 Budget. The deficit of A$690 million represented 0.0 percent of gross domestic product.

Total receipts were A$11.5 billion higher, with payments A$6.6 billion lower than expected at the time of the 2018-19 Budget, he said.

The outcome showed that spending as a share of GDP in 2018-19 at 24.6 percent of GDP, which was below the long-run average of 24.7 percent for the second consecutive year.

Frydenberg said with about 300,000 additional jobs created in 2018-19, employment grew by 2.6 percent, well above the 1.5 percent growth forecast in the 2018-19 Budget.

Elsewhere, data from the Australian Bureau of Statistics said the unemployment rate rose slightly to 5.3 percent in August.

Unemployment increased by 4,100 to 716,800 persons and employment increased by 34,700 to 12.92 million.

The monthly underemployment rate increased by adjusted 0.1 to 8.6 percent. Likewise, the monthly underutilization rate increased by 0.1 to 13.8 percent.

Andrew Hanlan, a senior economist at Westpac said risks to the 2019/20 surplus of A$7.1 billion are to the upside.

Hanlan noted that the budget upside may be short lived. If commodity prices do moderate in 2020, then nominal GDP growth for 2020/21 will likely fall short of the 3.75 percent Budget forecast.