The deficit for the 2011-12 year was estimated to be $37 billion by Treasury in the later part of last year and could likely be as high as $40 billion based on government statements on declining revenues. To move to a surplus for the 2012-13 year will be far from easy.
With that in mind it is important to recognise that the Australia we face today is very different from Australia pre-Global Financial Crisis (GFC). There have been significant structural shifts.
- a declining Gross Domestic Product (GDP) ratio
- increased household savings and lower consumption
- long term decline in productivity.