The Treasury has confirmed the deficit for the current year will come in at $30.1 billion, in line with forecasts from Treasurer Chris Bowen.
According to the Treasury and Finance’s Pre-election Economic and Fiscal Outlook, the deficit will be $30.1 billion in the current year, followed by $24 billion in 2014-15 and $4.7 billion in 2015-16.
In 2016-17 the PEFO has forecast a return to surplus of $4.2 billion.
GDP growth is forecast to reach 3% in 2014-15.
“Against the backdrop of a still challenging global outlook, the Australian economy is expected to transition away from resource-investment led growth towards broader based growth, although this transition may not occur as smoothly as forecast,” Treasury said.
“This transition is proceeding broadly as expected, although the expected peak in investment is lower than at budget, with the sector having become increasingly cautious in the allocation of capital,” the PEFO said.
Business confidence is at an eight month low, despite a fall in the Australian dollar and interest rates.
Business conditions have remained unchanged at their lowest levels since May 2009, despite slightly better trading and employment conditions.
The small positives were offset by deteriorating profitability, with Western Australia now ranking as the weakest state.
The latest NAB monthly business survey found conditions are the worst in the manufacturing, construction, mining, retail and wholesale sectors, with forward orders, stocks and employment still poor.
Australian shares opened flat this morning, virtually unchanged after a positive day of trading yesterday.
The S&P/ASX 200 benchmark was two points higher at 5110.7, just before midday.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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