Don’t expect $30 billion surplus
The forecast for economic growth will be revised down while expectations for inflation will be revised up in the May budget according to Treasury Secretary Ken Henry. As one of the main architects of the Federal Government's budget which will be released on May 13, Dr Henry also said that market predictions of a $30 billion surplus over the next financial year are too high. Growth across the economy is expected to slow, with the exception of the commodities sector, which will weaken company earnings and the falling share market will impact superannuation and capital gains income, all of which will eat into government revenue. Some estimates expect that lowers capital gains tax alone will wipe $5 billion for the surplus.
Source: Sydney Morning Herald