Strong commodity prices help narrow Australia’s budget deficit According to Reuters

© Reuters. Office buildings including the Commonwealth Bank, IAG and Rabobank logos are seen amid easing coronavirus disease (COVID-19) restrictions in Sydney’s Central Business District, Australia, June 3, 2020. Photo taken June 3, 2020. REUTERS / Lo

SYDNEY (Reuters) – Stronger commodity prices helped narrow Australia’s budget deficit in the last financial year by around A$50 billion ($34 billion), Treasurer Jim Chalmers said on Tuesday, pressing emphasized that much of the improvement was due to temporary factors.

In a preview of the federal budget due to be presented in full next month, Chalmers said more than half of the improvement was due to higher iron ore and coal prices that have benefited Australia – one of the world’s biggest producers. the world’s leading producer of iron ore and coal. .

Chalmers does not see a similar increase in sight as benchmark October iron ore prices on the Singapore Exchange (OTC:) are down more than 15% since August 1.

“We want to tell people ahead of time what we’re seeing in the (final budget) numbers when they finalize,” Chalmers told a news conference.

The government in March forecast a budget deficit of A$79.8 billion for the financial year ending June 30, 2022. That figure will now “remain at A$30 billion”, Chalmers said. speak.

He also warned Australians not to expect more cost-of-living relief measures than has been announced.

The government doesn’t want its bailouts to “backfire” and make it harder for the central bank to tame soaring inflation, Chalmers said. The Reserve Bank of Australia has raised interest rates over the past five months by a total of 225 basis points.

Even as families face financial strain, the recently elected centre-left Labor government says the fuel consumption tax cuts introduced by the former union ahead of the May election will come to an end. scheduled for September 28.

With gasoline prices expected to rise by about 25 cents a liter, Mr Chalmers said Australia would support the G7 group’s efforts to impose a price ceiling on Russian oil.

(1 dollar = 1.4888 Australian dollars)

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