The Australia economy is significantly stronger than was forecast at the time of the release of the Mid-Year Economic and Fiscal Outlook in late December.
So says Finance Minister Mathias Cormann.
The Government Monthly Financial Statement for the six months to December, shows that tax revenue is flowing in to the government coffers at a 1.1 per cent faster pace ($1.754 billion in six months) than was forecast at MYEFO.
Encouragingly, the increase is quite broadly based.
With today's $800 million borrowing from the Federal government, the total amount of gross borrowing has topped $50 billion - $50.65 billion to be precise - since the election in September last year.
The government has had to borrow to cover the existing deficit as well as to cover some of its decisions on 'border protection' and the $8.8 billion is spent on the reserves of the Reserve Bank of Australia.
The total amount of gross debt on issue stands at $300.6 billion, a record high and up some $27.4 billion since the election.
Adam Smith, the father of economics, noted:
• "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from regard to their own interest".
So too Australian farmers.
It seems most of the market has missed it, but the Australian dollar has already had its sell-off, dropping from 110 US cents in July 2011 to 86.60 cents just last month. The peak to trough fall is over 20%.
Down at around 87 or 88 cents was the time to get in because the pick up, back to around 90 cents at the moment, is just the start of trend that should see the AUD move back to 95 cents and then above parity.
UPDATE 1.20pm, Canberra time:
Aussie dollar now 0.8945; US stock futures down 0.2 per cent, Chinese stocks down 2 per cent, European stock futures down 0.5 to 1 per cent. Market assessing the G20 growth objective as useless, meaningly and unreachable. Hot air swallowed by an easily plied few, but not the markets. SK
It's Monday morning and financial markets are passing their judgment on the G20 Finance Ministers and Central Bank Governor's meeting in Sydney over the weekend.
The headline grabbing quest for an additional 2 per cent economic growth over 5 years for the world economy has been met with nonchalant indifference. US stocks futures are a piddling 0.1 per cent higher, recouping a fraction of the 0.3 per cent fall that was registered on Friday; commodity prices are flat; and in what should be a super-charging development for the Australian dollar – stronger global economic activity – the Aussie is less than 0.1 per cent higher at 0.8980.
The Abbott government just borrowed a further $800 million, which brings the cumulative total of gross borrowings since 9 September 2013 to $48.85 billion.
The Australian Office of Financial Management has indicated it will borrow a further $1.8 billion next week which will bring the amount of gross debt issued since the election to over $50 billion in just over five months.
This article was first published in The Melbourne Review https://www.melbournereview.com.au/commentary/article/joe-hockey-treasury-or-trickery
In the move to a budget surplus, how much is Joe Hockey's prowess as Treasurer and how much is trickery?
The Abbott government's chances of re-election in 2016 will be driven by the budget next year.
On 12 May 2015, Treasurer Joe Hockey will deliver his second budget and in doing so, he will announce that the budget is back on track, the Labor mess has been cleaned up and that for 2016-17 and beyond, there will be budget surpluses.
Treasurer Joe Hockey and Employment Minister Eric Abetz must be delighted with the current structure of the industrial relations system and the degree of flexibility in the labour market.
Recent labour force data have confirmed a near text book degree of flexibility in wages. At a time when employment growth is softening and the unemployment rate has been edging up, there has been a slowing in the pace of wages growth.
Here are the facts.
In 2012-13, average earnings for a worker in paid employment in Australia were approximately $57,000 for the year.
On those earnings, the income tax plus the Medicare levy was approximately $10,925.
The tax refund to News Corporation reported in today's AFR, as it won a legal battle "from a series of paper shuffles between subsidiaries", as the AFR's Neil Chenoweth put it, was $882 million.
This $882 million from "paper shuffles" is equal to the income tax paid, including the Medicare levy, for around 80,700 workers on average incomes.