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MYEFO: Mid-year budget update shows these aren’t ordinary times

The ABC’s Ian Verrender comments (19.12.16) on the MYEFO economic update, and what it signifies for the Turnbull federal government’s economic program.

‘Not all Scott Morrison’s Christmases have come at once — but at least it’s a start.

‘The good news from the Mid-Year Economic and Fiscal Outlook is the Treasurer appears to have achieved what few others have managed in recent years; an improvement in the current year compared to the May budget.

‘The bad news is the forecasts for next year and beyond look shocking. And those numbers will send a chill through global ratings agencies.

‘Thanks to windfall gains from an unexpected bounce in iron ore and coal prices, this year’s deficit is likely to come in at $36.5 billion — slightly below the May budget forecast of $37.1 billion.

‘Commodity prices have been soaring. Iron ore has risen 120 per cent this year, while coal for steel-making has shot the lights out with a 300 per cent gain.

‘Under ordinary circumstances, such a dramatic improvement in our terms of trade would have gone a long way to eating into that deficit and returning the budget to surplus. But these aren’t ordinary times.’

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