Deficit: $22.6 billion, up from $12.3 billion in the Mid-Year Economic and Fiscal Outlook (MYEFO) in November. This year’s deficit will increase to $49.4 billion from $41.5 billion in MYEFO. The famous “return to surplus” in 2012-13 remains intact — $3.5 billion, up a smidgeon from MYEFO.

GDP: 4%, up from 3.75% in MYEFO. But growth this year has fallen from 3.25% to 2.25% — in effect a third of the lost growth from this year will be regained in 2011-12. Growth in 2012-13 of 3.75% (after that they’re projections, not forecasts).

Unemployment: 4.75%, up from 4.5% in MYEFO, courtesy of a slowdown this year. But reaching 4.5% in 2012-13 (after that they’re projections, not forecasts).

Inflation: 2.75%, adjusted down from MYEFO’s 3%. But adjusted upwards by a full 0.5% in 2012-13 to 3%, at the RBA’s limit.

Housing: terrible — 2.5% growth this financial year, 1.5% in 2011-12. In last year’s budget, housing was forecast to grow at 7.5% this year, and 4% in 2011-12. Those forecasts have fallen into a deep hole.

The mining boom: non-dwelling construction investment to grow at 18.5%, machinery and equipment to grow at 17.5%.

Terms of trade: -0.25% in 2011-12. It’s basically flat, but is on the back of a huge 19.25% rise this year (revised up by 5% from MYEFO).

Real spending: (Labor has set itself a 2% cap): 2011-12: 0.5% 2012-13 -0.1% 2013-14 1.9% 2014-15 1.9%.

Receipts: $342 billion, 23.2% of GDP.

Payments: $362 billion, 24.5% of GDP.

Net financial worth: -$200.6 billion, peaking in 2011-12.

*Note: Forecasts and estimates apply to the next two years of forward estimates 2011-12 and 2012-13; after that, they’re projections, and revert to trend.

Peter Fray

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