Treasurer Josh Frydenberg is forecasting a slightly smaller budget deficit for the 2021/22 financial year, while predicting strong growth and a sharp fall in the unemployment rate.
He is also predicting in his mid-year budget review wages growth of three per cent in 2023/24, a rate not seen since the coalition came to power in 2013.
"The MYEFO shows an improvement in the fiscal outlook since the 2021/22 budget, even accounting for the impacts of the Delta imposed lockdowns," the treasurer and Finance Minister Simon Birmingham said in a joint statement on Thursday. "Consistent with the strong economic recovery, the unemployment rate is forecast to reach 4.25 per cent in the June quarter of 2023," they said.
While forecasting wages growth of three per cent in 2023/24, in the immediate future, earnings are expected to lag the rate of inflation.
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