Powered by MOMENTUM MEDIA
subscribe to our newsletter

Australia’s Budget boom ending: Deloitte

The glory days of Australia’s Budget boom have passed as the outlook is bleak for the economy.

A report by Deloitte projects revenues will fall short of the Budget forecast by $2.3 billion in 2014/2015, and by $7 billion in 2015/2016.

Deloitte said the biggest impact on the Budget in recent months has been renewed write-downs from a “souring” economic backdrop.

“Those costs of a further weakening in the economic backdrop are even bigger than the policy savings the government announced in May, and that the Senate has since largely rejected,” the firm said.

The report also estimates that with the latest round of commodity price falls “hitting taxes with a lag”, the shortfall in profit taxes will reach $4.2 billion in 2015/2016.

Advertisement
Advertisement

However, while most taxes continue to disappoint, spending taxes are increasing.

“Low interest rates are coaxing more spending out of Mr and Mrs Suburbs, and the resultant boost to GST revenues is being supercharged by a healthy pick-up in the pace of housing renovation and construction,” Deloitte said.

“At the same time, the downward lurch in the Australian dollar is pushing up import prices, and hence adding to the take on customer duties.”

Deloitte said this combination of effects leaves spending taxes outperforming official Budget forecasts by $2.7 billion in 2014/2015 and $2.6 billion in 2015/2016.

Australia’s Budget boom ending: Deloitte

PROMOTED CONTENT


>A report by Deloitte projects revenues will fall short of the Budget forecast by $2.3 billion in 2014/2015, and by $7 billion in 2015/2016.

Deloitte said the biggest impact on the Budget in recent months has been renewed write-downs from a “souring” economic backdrop.

“Those costs of a further weakening in the economic backdrop are even bigger than the policy savings the government announced in May, and that the Senate has since largely rejected,” the firm said.

The report also estimates that with the latest round of commodity price falls “hitting taxes with a lag”, the shortfall in profit taxes will reach $4.2 billion in 2015/2016.

However, while most taxes continue to disappoint, spending taxes are increasing.

“Low interest rates are coaxing more spending out of Mr and Mrs Suburbs, and the resultant boost to GST revenues is being supercharged by a healthy pick-up in the pace of housing renovation and construction,” Deloitte said.

“At the same time, the downward lurch in the Australian dollar is pushing up import prices, and hence adding to the take on customer duties.”

Deloitte said this combination of effects leaves spending taxes outperforming official Budget forecasts by $2.7 billion in 2014/2015 and $2.6 billion in 2015/2016.

Australia’s Budget boom ending: Deloitte
mortgagebusiness

Latest News

The major bank has confirmed that it will not proceed with the demerger of its New Zealand business. ...

The Senate has passed a bill that will establish an authority that ASIC and APRA are accountable to, two years after it was recommended by t...

The big four bank has said that it has increased its serviceability floor rate to ensure it continues to lend responsibly, and has predicted...

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.