In an anticipated mid-year budget announcement, Australia's Treasurer Jim Chalmers has revealed a promising fiscal outlook for the country. The gross debt for the fiscal year ending in June 2024 is expected to be near A$900 billion (approximately $592 billion). This estimate is a marked decrease from earlier projections, which had gross debt surpassing a trillion dollars.
Stronger than Expected Economy
The Australian economy has proven resilient, with population growth fueling higher inflation and property prices. Despite the Reserve Bank of Australia's forecast of slower GDP growth, higher interest rates, and increased inflation, the government is taken aback by the significant population growth and rise in property prices.
Strategies to Boost Housing Stock
The federal government has introduced a strategy to triple application fees for foreign investors purchasing property and increase penalties for leaving homes vacant. The aim is to free up more housing stock and raise half a billion dollars each year to fund other housing policy measures. These changes are designed to encourage foreign nationals to invest in new projects and make them available for Australians to rent affordably.
A Healthier Fiscal Position
Treasurer Jim Chalmers has flagged a A$147 billion lower gross debt in forecasts for the forward estimates, falling below the trillion-dollar mark to A$909 billion by the end of this financial year. Furthermore, Chalmers indicated a fall in gross debt as a share of the economy, peaking lower than forecast. This downward revision of debt levels implies that Australia may be in a healthier fiscal position than anticipated.