Iron ore gives Budget boost
Article courtesy of The West Australian
Australia’s Budget bottom line is recovering faster than expected, driven largely by the strength of WA’s iron ore sector, with analysts now suggesting it could be back in surplus within four years.
Since December’s mid-year outlook, the Federal Government’s Budget has already improved by $23 billion.
Analysts from investment bank UBS expected that if the current rate of progress continued the Budget could return to balance in 2024-25, with an overall $200b improvement across the profile.
As unemployment rates hit near-record lows, business profits recover and asset prices boom, UBS suggested there was limited “structural scarring” on the Budget from COVID which had accelerated the recovery.
That was complemented by the surging price of iron ore, which had defied Government estimates.