<?xml version="1.0" encoding="ISO-8859-1"?> <docID>333574</docID> <postdate>2024-11-20 17:17:12</postdate> <headline>‘A sliver’: don’t expect oversized budget windfalls</headline> <body><p><img class=" wp-image-333575" src="https://citynews.com.au/wp-content/uploads/2024/11/20220804001686376508-original-1.jpg" alt="" width="602" height="401" /></p> <caption>The years of "rivers-of-gold tax revenue" are "probably behind us", economist Shane Oliver says. (James Gourley/AAP PHOTOS)</caption> <p class="wire-column__preview__author"><span class="kicker-line">By <b>Poppy Johnston</b> in Canberra</span></p> <p>Any windfall in the mid-year federal budget update is expected to fall well short of revenue upgrades of the past few years.</p> <p>Treasurer Jim Chalmers has played down the size of revenue write up, citing a slowdown in the jobs market, weaker corporate tax revenue and structural challenges in the Chinese economy dragging down iron ore prices.</p> <p>"There's still a fair bit of data to land before MYEFO, including national accounts and tax collections, but Treasury's latest estimate is that any upgrade will be a sliver of what we saw in those first four budget updates," Dr Chalmers told parliament on Wednesday.</p> <p>The average revenue upgrade in the past four budget updates has been $80 billion.</p> <p>AMP chief economist Shane Oliver agreed "the years of the rivers-of-gold tax revenue flying into Canberra were probably behind us".</p> <p>"I don't think it's going to be anywhere near the scale of upgrading seen in recent years because the jobs market hasn't been significantly better than expected," he told AAP.</p> <p>Similarly, the iron ore price was a little ahead of typically conservative Treasury forecasts but not dramatically higher as it had been in the past.</p> <p>Dr Oliver said corporate profits outside of mining were generally "quite soft".</p> <p>"So any upside surprise we do see, it's going to be far more modest," he said.</p> <p>The mid-year economic and fiscal outlook will be released in December.</p> <p>Shadow Treasurer Angus Taylor urged Dr Chalmers to use the opportunity to restore budget discipline and tame inflation.</p> <p>He promised a "back to basics economic agenda" if the coalition won the upcoming federal election.</p> <p>"Fighting high prices and interest rates first, winding back regulatory roadblocks, boosting productivity and delivering lower, simpler and fairer taxes," Mr Taylor said in parliament on Wednesday.</p> <p>While the strength of the labour market and commodity prices have helped the government repair the budget position and deliver back-to-back surpluses, Dr Chalmers said the turnaround "hasn't been accidental or incidental".</p> <p>"We've found almost $80 billion in savings, banked the majority of revenue upgrades and saved tens of billions of dollars in interest on debt as a result."</p> <p>Treasury's economic forecasts are expected to look similar to those in the May budget.</p> <p>Rich Insight economist Chris Richardson said little change to inflation forecasts could be a clue to the fate of power bill relief.</p> <p>"Sticking to their guns on inflation forecasts is certainly consistent with the thought that Mr And Mrs Suburbs get another year on their electricity rebates," he told AAP.</p> <p>In the May budget, Treasury forecast headline inflation at 2.75 per cent in the year to June 2026.</p> <p>The Reserve Bank of Australia has the headline rate jumping back to 3.1 per cent at that time, assuming the electricity rebates end.</p> </body>