"The business community welcomes the further improvements to the outlook, both for the budget bottom line and the Commonwealth Government's debt position, as revealed in today's Mid-Year Economic and Fiscal Outlook (MYEFO)," Innes Willox, Chief Executive of the national employer association Ai Group said today.
"The outlook both for the economy and for the budget underline the importance of the Government honouring its promise to deliver the legislated Stage 3 tax cuts.
"These tax cuts have been factored into the Budget's growth and inflation forecasts as well as those of the Reserve Bank of Australia. They are set to play an important role in the modest lift in economic growth from an anticipated 1.75 per cent in the current year to 2.25 per cent in 2024-25 and they can go ahead while tax collections are still set to underwrite the improvements to the budget bottom line announced by the Treasurer today.
"The improvements between the May Budget and today's MYEFO are driven by higher expected tax collections (which are higher than in the May Budget by $64.4 billion over the forward estimates). This compares with improvements to the underlying cash balance of just shy of $40 billion over the same period with higher spending subtracting $27.8 billion from the underlying cash balances anticipated at the time of the May Budget.
"While the economy is set to slow markedly in the current financial year, the Government is still expecting a soft landing that returns inflation to below 3 per cent in 2025 while employment is anticipated to continue to grow, albeit slowly," Mr Willox said.
