Treasurer Scott Morrison is set to announce a plan to return the Budget to surplus in 2019-20, a year earlier than expected.
Treasurer Scott Morrison is set to announce a plan to return the Budget to surplus in 2019-20, a year earlier than expected.

Budget on track for early surplus

THE Treasurer is set to announce a plan to return the budget to surplus in 2019-20, a year earlier than expected.

But it will be a slim figure of less than $5 billion, according to the Daily Telegraph.

Treasurer Scott Morrison told the newspaper the economy had "strengthened" since his last surplus forecast.

"More specifically, on the path back to surplus, to bring the budget back into balance, for five successive statements now, and it will be true in the sixth, we've been very clear about bringing the budget back into balance by 2021," he said.

"Now, we stuck to that. It hasn't moved. If anything it strengthened over that period of time and we've been very cautious and conservative when it comes to our forecasts."

The Government plans to keep growth in spending to no more than two per cent, allowing for inflation.

Spending is expected to be $10 billion less in 2017-18 than forecast in the Abbott government's unpopular 2014-15 Budget.

The last time the budget recorded a surplus was in 2007, when it was $19.8 billion in the black under John Howard.

For this financial year, a deficit of $23.6 billion has been forecast, although the Government's most recent monthly financial statement suggests the budget is running about $8 billion better off than forecast.

"The plan for a stronger economy that I'll be announcing tonight is about improving the opportunities for all Australians to live in a stronger economy," the Treasurer said on Sky News this morning. "It's a plan for lower taxes and for reducing the pressure on households. It's a plan to back business to create more jobs. It's a plan to guarantee the essential services Australians rely on every day."

Deputy Opposition Leader Tanya Plibersek hit out at the Government this morning, saying they were providing the "wrong type of tax relief" to Australians.

"We know this Government is committed to a tax cut for people on more than $180,000 a year, so that someone earning $1 million a year will get a $16,000-a-year tax cut," she said on Sky News.

"That's the wrong type of tax relief. We think it is absolutely a wrong priority for Australia at the moment to be directing massive tax giveaways to huge corporations, multinational companies and overseas shareholders.

"Those companies have already made it clear they're not going to be handing those tax cuts back to workers as higher wages. It'll be increased dividends for overseas shareholders and you can bet your bottom bottom dollar there will be increases to executive pay packets too."

Amid rising anticipation for tonight's Federal Budget, Mr Morrison dismissed expectations of an overly generous plan, telling the nation not to expect "mammoth" tax cuts.

"I'm not going to pretend these would be mammoth tax cuts," he told Nine News on Sunday.

"They will be what is affordable, they will be real and they will be within what the Budget can afford."

Among the expected budget announcements are a "record spend" for infrastructure projects and the Great Barrier Reef, no more Medicare levy hike, a crackdown on illicit tobacco and a free whooping cough vaccination for pregnant women.