Budget Deficit Widens by A$10bn in Australia

16 Dec , 2014

The Australian government has warned that it expects the nation’s deficit to grow to A$40.4bn (£21.2bn) in the 12months to June.

Earlier this year, the projection had been forecast to come in at A$29.8bn. Falling prices in key export commodities has hurt the economy according to the country's treasurer, Joe Hockey.

The Mid-Year Economic and Fiscal Outlook (MYEFO), has reported that the nation's tax receipts have been revised down by $A31.6bn due to a more than 30% fall in iron ore prices, together with unexpectedly low wage growth. The report also said the deficit should narrow to $A11.5bn by between 2017 and 2018.

Despite the significant change to the deficit forecast, the government noted that Australia's economy would continue to be supported by historically low interest rates, lower energy prices, and a weaker Australian dollar.

One potential area of focus for future growth in Australia is continued investment in infrastructure projects, which will help to create more jobs and reduce congestion in busy urban areas.

The report's release was delayed as a result of an armed siege in Central Sydney yesterday, which was finally resolved in dramatic style after a 16 hour stand-off between armed police and the hostage taker.

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