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A decade of deficits and a modest $5.5b election war chest

The article from the Australian Financial Review discusses the federal government's financial outlook as outlined in the mid-year economic and fiscal outlook (MYEFO). It highlights that Australia is facing a decade of budget deficits, with the current year's deficit projected at $1.1 billion, significantly lower than previously forecasted due to higher commodity prices and a stronger labor market. Despite this, the government's financial position remains weak with gross debt expected to reach $1 trillion by 2026-27. The article also notes that the government has a modest $5.5 billion set aside for pre-election spending, which is considered insufficient for significant policy announcements or voter incentives. Treasurer Jim Chalmers has emphasized fiscal responsibility, focusing on managing inflation and cost-of-living pressures rather than engaging in expansive spending. The piece also touches on the political implications, suggesting that the opposition might use the government's fiscal constraints to their advantage in the upcoming election campaign.

Read the Full The Australian Financial Review Article at:
[ https://www.afr.com/politics/federal/a-decade-of-deficits-and-a-modest-5-5b-election-war-chest-20241218-p5kz6x ]