"Faster than expected falls in commodity prices have resulted in a weaker outlook for company tax"
- Treasurer Chris Bowen
Australian authorities said Friday the nation's budget deficit will blow out to A$30.1 billion dollars this fiscal year and revenues are tumbling, as the government unveiled a pre-election budget that includes a controversial plan to implement tax on bank deposits. Treasurer Chris Bowen now expects a shortfall of A$33.3 billion during the next four years, twice longer than previously expected. Moreover, the government has cut its growth estimates for this year to 2.5%, down from 2.75% expected in May, while the unemployment is projected to rise to a more than decade-high of 6.25%. As the economy is struggling to switch from mining sector to other industries, latest estimates may limit the scope for the current Prime Minister Kevin Rudd and opposition leader Tony Abbott to embark on a spending spree during their election campaigns.
The country's government also has unveiled a levy on some bank deposits in order to raise funds as they are aiming at safeguarding against a collapse of banking sector. Deposits up to A$250,000 will now have to pay a tax of 0.05% starting from January 2016. This levy will be imposed on banks, but not account holders, however, banks have already warned that costs may be passed on to customers.
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