MYEFO 2013
The Mid-year Economic and Fiscal Outlook (MYEFO) has been published today by The Honourable J. B. Hockey MP Treasurer of the Commonwealth of Australia and Senator the Honourable Mathias Cormann Minister for Finance of the Commonwealth of Australia
The Charter of Budget Honesty Act 1998 requires the Treasurer to publicly release and table a Mid-year Economic and Fiscal Outlook (MYEFO) report by the end of January in each year, or within 6 months after the last budget, whichever is later.
Since the first MYEFO report in 1997-98 the Treasurer and the Minister for Finance and Deregulation have issued the report as a joint statement.
The purpose of the MYEFO report is to provide updated information to allow the assessment of the Government’s fiscal performance against the fiscal strategy set out in the current Budget Papers (Budget Paper No. 1).
Overview:
The key summary position of the document states:
The budget position has deteriorated significantly since the 2013 Pre-Election Economic and Fiscal Outlook (PEFO). Budget deficits totalling $123 billion are now expected across the forward estimates, with a $47 billion deficit expected in 2013-14 — 3.0 per cent of Gross Domestic Product (GDP). Without policy change and taking no remedial action, budget deficits would be projected in each and every year to 2023-24.
The major economic parameters suggest a softening and slowing of domestic prices and wages and thus there is a commensurate reduction in the forecast Real GDP from 3% [ PEFO Pre-Election Economic and Fiscal Outlook ] to 2.5%
Education, Training & Climate
Of immediate note and direct interest to many of my readers will be the changes within the Education and Training portfolio indicated over the outer years of the budget, particularly:
- Trade Training Centres — cessation
redirecting funding over six years under the Building Stronger Communities Fund ($528 million) and Trade Training Centres ($987 million) and other smaller portfolio savings, to broadly offset the cost of Students First — A fairer funding agreement for schools. The savings decisions for the Building Stronger Communities Fund and Trade Training Centres are expected to decrease cash payments by $104 million in 2013-14 ($841 million over four years);
The Government will achieve savings of $986.5 million over five years (including $375.8 million in 2017-18 and $298.0 million in 2018-19) by ceasing the Trade Training Centres programme.
- Australian Curriculum, Assessment and Reporting Authority — reduction in funding
The Government will refocus the Australian Curriculum, Assessment and Reporting Authority’s (ACARA) activities to ensure it is developing the highest possible standard curriculum and direct its resources to developing benchmarking processes so Australia can compare its curriculum against the world’s best. As part of this refocussing, ACARA’s funding will be reduced by $20.0 million over four years.
- Department of Climate Change
The Government will achieve savings of $45.0 million over four years (and $12.8 million per annum from 2017-18) by reducing the functions of the former Department of Climate Change and Energy Efficiency that were transferred to the Department of the Environment, the Clean Energy Regulator, the Department of Industry and the Department of Foreign Affairs and Trade.
Links:
- Charter of Budget Honesty Act 1998
- Mid-year Economic and Fiscal Outlook (MYEFO)
- Economic Statement 2013-2014
