The Treasurer, Joe Hockey, has released the Mid-Year Economic and Fiscal Outlook (MYEFO) which shows the federal budget deficit will increase by $17.5 billion to $47.6 billion this year, with total deficits of $123 billion over the next four years.
The MYEFO forecasts gross debt to reach $667 billion in a decade and be around 26% of GDP in 2023-24. Net debt is expected to peak at 16.2% in 2018-19, the highest since 1996-97.
Hockey released the MYEFO in an address the National Press Club in Canberra. It forecasts a budget deficit for the fiscal year 2014-15 of $33.9 billion and $24 billion in 2015-16. Whereas both the Coalition and the ALP said they would deliver a budget surplus in 2016-17, MYEFO forecasts a deficit of $17.7 billion.
Unemployment, currently 5.8%, is predicted to be 6% in June, rising to 6.25% for the next three years, adding $3.7 billion to the welfare bill. A blowout of $11.3 billion is forecast for the welfare budget. [Read more...]