MYEFO explained: the budget bottom line in 4 charts

Updated

The budget deficit for this financial year will be $40.4 billion, more than $10 billion larger than forecast in May, Treasurer Joe Hockey has revealed.

See how the forecast bottom line revealed in today's Mid-Year Economic and Fiscal Outlook compares to previous outlooks.

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Explained: How the budget bottom line has changed

August 2013: Pre-election forecast



In August last year, Treasury released the Pre-Election Economic and Fiscal Outlook (PEFO), which forecast the budget deficit would hit $30 billion in 2013-14 before turning around and gradually heading back towards a surplus.

The deficit for the current financial year was expected to be $24 billion, falling to $5 billion in 2015-16. A surplus of $4 billion was projected for 2016-17.

December 2013: Hockey's mid-year update



By the time Treasurer Joe Hockey released the Mid-Year Economic and Fiscal Outlook (MYEFO) in December, the situation looked worse, with no surplus visible in the forward estimates.

The outlook for 2013-14 had fallen further to a $47 billion deficit, to be followed in subsequent years by deficits of $34 billion, $24 billion and $18 billion.

These forecasts were all considerably worse than had been set out in PEFO.

May 2014: The first Hockey budget



The May budget saw a further deterioration of expectations for the 2013-14 financial year, with the deficit projection slipping further to $50 billion.

But beyond that the forecast was slightly rosier than set out in MYEFO, with the following deficits put at $30 billion (2014-15), $17 billion (2015-16), $11 billion (2016-17) and $3 billion (2017-18).

December 2014: The latest outlook



Now, MYEFO is forecasting a budget deficit of $40 billion for the current financial year - up more than $10 billion compared to the budget forecast, released seven months ago.

Looking further ahead, the deficit is expected to be $31 billion in 2015/16, $21 billion in 2016/17 and $12 billion in 2017/18.

In August last year, Treasury released the Pre-Election Economic and Fiscal Outlook (PEFO), which forecast the budget deficit would hit $30 billion in 2013-14 before turning around and gradually heading back towards a surplus.The deficit for the current financial year was expected to be $24 billion, falling to $5 billion in 2015-16. A surplus of $4 billion was projected for 2016-17.By the time Treasurer Joe Hockey released the Mid-Year Economic and Fiscal Outlook (MYEFO) in December, the situation looked worse, with no surplus visible in the forward estimates.The outlook for 2013-14 had fallen further to a $47 billion deficit, to be followed in subsequent years by deficits of $34 billion, $24 billion and $18 billion.These forecasts were all considerably worse than had been set out in PEFO.The May budget saw a further deterioration of expectations for the 2013-14 financial year, with the deficit projection slipping further to $50 billion.But beyond that the forecast was slightly rosier than set out in MYEFO, with the following deficits put at $30 billion (2014-15), $17 billion (2015-16), $11 billion (2016-17) and $3 billion (2017-18).Now, MYEFO is forecasting a budget deficit of $40 billion for the current financial year - up more than $10 billion compared to the budget forecast, released seven months ago.Looking further ahead, the deficit is expected to be $31 billion in 2015/16, $21 billion in 2016/17 and $12 billion in 2017/18.

The MYEFO budget update shows the federal government will receive $31.6 billion less in tax receipts over the next four years - a fall mostly driven by a 30 per cent collapse in iron ore prices and weaker than expected wage growth.

Weaker growth in wages and employment are forecast to lower tax receipts by $2.3 billion this financial year and $8.6 billion over the forward estimates.

Topics: budget, federal-government, federal-parliament, australia

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