Hopes of a Government Budget surplus in the financial year just ended have been given a boost, with new data showing the books were in the black by $320 million more than forecast at the end of May.
The financial statements for the 11 months to May 31 showed a surplus on the operating balance before gains and losses (Obegal) of $2.3 billion against a forecast $1.98b.
The surplus of $2.3b compared to an Obegal surplus of $1.2b at the same time last year. Tax revenue has increased by 5.7 per cent while expenses grew by 2.3 per cent over that time.
It looks likely we will make surplus for a 2nd consecutive year. That is not an insignificant achievement – and one few other countries in the OECD have managed.
Here’s the current deficits in other countries as a percentage of GDP:
- Canada 1.3%
- Ireland 2.3%
- Australia 2.8%
- France 3.5%
- UK 4.4%
- US 4.9%
Now remember this is the deficit as a proportion of the size of the economy. As a proportion of government revenue they will often be around two to three times as big.
So we’re situated pretty well. Having a surplus means we get to have a choice about how much should go on extyra spending, debt reduction or tax cuts. Deficits means little choice.