CANBERRA, March 14 (Xinhua) -- Australia's Treasurer Jim Chalmers warned on Thursday that falling commodity prices and an uptick in unemployment will negatively impact revenue projections in Australia's upcoming federal budget.
Chalmers made the remarks in a speech to a committee for economic development, while outlining the Australian government's approach to its third federal budget, which he will hand down in May.
He identified global uncertainty, persistent cost-of-living pressures and slowing growth as the three biggest drivers of the government's thinking regarding the budget.
He said that the Australian government can no longer rely on large revenue upgrades, caused by tax receipts coming in larger than projected, due to the falling price of iron ore and a softening labor market.
The Mid-Year Economic and Fiscal Outlook released in December 2023 forecast a 69 billion Australian dollar (45.6 billion U.S. dollar) budget revenue windfall over the next four years, but Chalmers said it would now be much less.
"In each of our first two budgets we benefited from more than 100 billion Australian dollars (66.2 billion dollars) in revenue upgrades. This year, we won't see anything like that," he said.
Iron ore is Australia's biggest export, with exports worth 132.4 billion Australian dollars (87.6 billion dollars) in fiscal year 2021-22.
However, Chalmers noted in his speech that the price of iron ore has fallen 10 percent last week.
"Its current price is around 20 percent lower than it was this far out from last year's budget," he said.
Chalmers said Australia's labor market has been resilient but is now softening, which hurts government revenue through lower income tax receipts and higher welfare payments.
He said that the government is still aiming for a second consecutive budget surplus in fiscal year 2023-24. ■