The Australian Government has released the 2021-22 Mid‑Year Economic and Fiscal Outlook (MYEFO), which shows an improvement in the fiscal outlook even after accounting for the impacts of the Delta imposed lockdowns.

Key points in this week’s MYEFO include:

  • The underlying cash balance in 2021-22 is now expected to be a deficit of $99.2 billion (4.5 per cent of GDP), a $7.4 billion improvement since the 2021-22 Budget. And $2.3 billion stronger across the forwards.
  • Real GDP is expected to grow by 4.5 per cent in 2021, and by 4.25 per cent in 2022.
  • The unemployment rate is forecast to reach 4.25 per cent in the June quarter of 2023. This would represent the first time since before the Global Financial Crisis that Australia has sustained an unemployment rate of below 5 per cent and only the second time since the early 1970s.
  • Tax receipts as a share of GDP are forecast to fall from 22.9 per cent in 2020-21 to 22.1 per cent in 2024‑25.
  • Gross debt is expected to be 41.8 per cent of GDP at 30 June 2022 and is projected to stabilise at around 50 per cent of GDP in the medium term.

The Government has also announced additional funding, which includes:

  • $2.3 billion in funding commitments for new and existing infrastructure projects and more than $500 million to support rural and regional Australia.
  • $896.0 million to support a strong labour market recovery, address workforce shortages and build workforce capability, equipping Australia’s workforce with the skills needed now and into the future.
  • $2.7 billion in 2021-22 and $26.4 billion over the four years to 2024-25 to support the National Disability Insurance Scheme.
  • $1.1 billion to support Aboriginal and Torres Strait Islander people in areas such as health, education, early childhood, justice, languages and assisting families.
  • $1.1 billion over 10 years to support reliable energy supply and a technology‑driven approach to emissions reduction as part of our roadmap to net zero by 2050.

The 2021-22 MYEFO is available on the Budget website.

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