Fast Lane: All eyes on Morrison as no end in sight for budget deficits

Small business owners and the wider business community will be paying close attention to what Scott Morrison says in two weeks time.

In a fortnight, the Treasurer will release the federal government’s mid-year economic and fiscal outlook and according to the latest research from Deloitte Access Economics, the outlook for the budget deficit is not good.

The Deloitte Access Budget Monitor forecasts this year’s deficit will hit $40.3 billion, which is a jump from the previous forecast of $35.1 billion.

Deloitte predicts next year’s budget deficit will come in at $34.1 billion, compared to a forecast of $25.8 billion.

The projected deficits for the 2017-18 and 2018-19 are also tipped to be billions of dollars worse.

Slower economic growth in China and continued declines in commodity prices are taking a toll on government revenue, with Deloitte predicting company tax receipts will be $4.4 billion less than expected in this financial year and $7 billion less than previously forecast for the next financial year.

Superannuation tax collections are also declining, with Deloitte predicting a $2.2 billion drop in the current financial year.

Overall, Deloitte predicts by 2018-19, the Australian economy will be 2.5% smaller than previously forecast by Treasury.

And to make matters more precarious, these projections from Deloitte assume the Senate will pass all of the potential budgetary savings currently before it.

If this doesn’t happen, Deloitte says the budget will be another $67 billion worse off during the coming decade.

Which makes what Scott Morrison and his team say in a fortnight – and what they do over coming months – even more important. 

Never miss a story: sign up to SmartCompany’s free daily newsletter.