Victoria’s surpluses take $1 billion hit
December 23, 2014
The Age: Victoria’s surpluses take $1 billion hit December 23, 2014 Richard Willingham, State Political Correspondent
Victoria’s surpluses have taken a $1 billion hit on the back of a weaker economy and higher than projected unemployment, new Treasury documents show.
The state is also bracing for a smaller GST distribution from 2016-17 because of other states’ mining royalties dropping and a slump in iron ore prices.
The mid-year budget update, tabled on the first day of the 59th Victorian parliament, showed forecast surpluses had been downgraded by $1 billion from the pre-election budget figures, to total just $8.1 billion over the four years to 2017-18.
The document also warns that there will only be a gradual drop in the average unemployment rate, with the yearly average expected to drop to 5.75 per cent by 2017-18. The 2014-15 rate has been revised up to 6.75 per cent.
“The unemployment rate is expected to fall gradually over the forward estimates in line with improving household demand, leading to increased hiring intentions by business,” the update says.
“However, the return to trend levels of unemployment is expected to be slower than previously forecast.” Continue Reading…