We don’t want surplus unless times ahead seem economically unstable enough that saving up is a better idea than progressing
Things are incredibly unstable right now and this surplus is evidence of that. Just a few years ago we had deficits around $100b.
The budget was designed to create a surplus of $4b which would have given government the ability to start thinking about how to recover from the recent massive defecits.
But because of the instability, the budget estimates were way off the mark — a large part of that was companies raising prices and making higher profits, therefore paying more tax. That’s both something the government has no control over and also something the government tried to prevent.
This is the best summary I could come up with:
The treasurer actually did nothing other than swing in their hammock (to quote Paul Keating on Peter Costello) as the world’s economy changed for good or ill.
The budget papers state that the extra $18bn came mostly from $12.7bn in better than expected company tax revenue due to “sustained elevated commodity prices”.
The government boasted the $100bn turnaround from a $77.9bn forecast deficit to a $22.1bn surplus was “the biggest nominal budget improvement in Australian history”.
Right now Barnaby Joyce is displaying surplus levels of chutzpah by suggesting the inland rail project is in danger of becoming a “white elephant”.
It was always going to be built on a flimsy business case that, as Gabrielle Chan noted, forecast that half of the freight to be carried on the completed rail would be coal.
As Alan Kohler recently noted, the economy is so near capacity that approving new fossil fuel projects actually limits the ability to build homes, or productive infrastructure because there are not enough construction workers to go round.
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