SYDNEY - Australia's ruling coalition yesterday (Tues) (April 2) revealed plans to deliver the nation's first surplus in more than a decade, releasing a federal budget aimed at reversing its poor standing in opinion surveys ahead of an election to be held within weeks.
In his first - and possibly last - budget as prime minister, Mr Scott Morrison, who became leader of the Liberal-National coalition last August, presented tax cuts and big-spending infrastructure projects targeting middle class and regional voters who will be crucial to his election prospects.
Following a decade of consecutive deficits, the Treasurer, Mr Josh Frydenberg, said that Australia will next year record a surplus of A$7.1 billion (S$6.8b), the first since 2007-08. The deficit this year is expected to be A$4.2 billion, aided by extra commodities exports and tax revenues.
"Tonight, I announce that the budget is back in the black and Australia is back on track," Mr Frydenberg told Parliament.
"For the first time in twelve years, our nation is again paying its own way. We have made real progress, but we know the job is not done."
Australia is currently enjoying its twenty-eighth year of consecutive economic growth - a world-record - fuelled by China's rise and strong demand for resources such as iron ore and coal. The unemployment rate is at the historically low level of 4.9 per cent.
But the nation is facing serious challenges, including plummeting house prices, stagnant wages, losses due to drought and flooding, and global concerns such as China's slowdown.
"Australia does face some serious challenges," Mr Frydenberg said.
"The global economy is slowing… Families face cost of living pressures. And every one of us wants to see wages growing faster."
The budget featured A$158 billion in tax cuts over the next decade, including immediate reductions for people earning up to A$126,000 per year. It also promised large-scale infrastructure spending that includes A$100 billion to fund rail, roads and projects to address congestion.
But the budget comes just days before Mr Morrison is expected to call a federal election. He told MPs yesterday that he was considering election dates of May 11, May 18, or May 25.
The Liberal-National Coalition was elected with a razor-thin majority at the last election in 2016. But the Liberal party has suffered from infighting which led to it deposing two successive leaders, Tony Abbott and Malcolm Turnbull. The most recent Newspoll opinion survey on March 10 showed the Labor opposition party leading the Coalition by 54 to 46 per cent.
Labor attacked the budget for failing to properly address long-term problems such as slow wage growth and climate change.
"This is a budget by a government which has given up governing," said Labor's shadow Treasurer, Mr Chris Bowen, told ABC News.
"The budget itself forecasts lower wages growth, lower economic growth, lower consumption growth, and has no plan to do anything about it."
Analysts largely praised the budget yesterday but suggested the handouts - particularly the tax relief - were unlikely to substantially boost the Coalition's vote. Some suggested that many voters will see it as a pre-election budget and will be sceptical about the forecast tax relief and surpluses.
Political commentator Peter Hartcher said the budget carefully promised handouts to selected constituencies and its long-term plans had been largely framed by concerns about the next six weeks.
"There's an inherent implausibility in a government that's had three prime ministers in six years trying to tell you the exact number of dollars and cents in your tax cut a decade hence," he wrote in The Sydney Morning Herald.
"(The budget) is not a blueprint for an ambitious reforming government but more like a lotto (lottery) results sheet where favoured constituencies can find their winning numbers."
Business groups largely welcomed the budget, saying the surplus and tax cuts would strengthen the economy and protect it from global jitters.
"As the budget itself warns, Australia cannot afford to be complacent and must better prepare for the global headwinds from a slowdown in China and domestic challenges," said the council's head, Ms Jennifer Westacott.
The budget forecast a total of A$45 billion in surpluses over the next four years, including A$11 billion in 2020-21, A$17.8 billion in 2021-22 and A$9.2 billion in 2022-23.