Looks like the perverse transfer of wealth (by Rio & BHP) with money from the Aussie battlers to China Inc and the People's Liberation Army is well and truely over.
Treasurer Joe Hockey says revenue slump will be worse than expected due to ‘extraordinary’ drop in iron ore price
THE Federal Government’s bottom line has been hit by a major downgrade of expected tax revenue, Joe Hockey has warned. Flagging a worse-than-expected result in the mid-year budget review to be released next week, Mr Hockey said he had to “write down a hell of a lot of revenue” as a result of a slump in the iron ore price.
“Since I delivered the Budget in May, we have seen iron ore prices drop by nearly 40 per cent, which is extraordinary,” Mr Hockey said yesterday. CUTS: Aid agencies could be in Joe Hockey’s sights FINANCIAL: Treasurer Joe Hockey releases Murray report “
Now, iron ore is one-fifth of Australia’s exports and the price to drop nearly 40 per cent in the last few months has meant that the Government’s revenues have fallen again.” The Treasurer said his Budget had taken a further hit from spending on an upgrade to the computer system used by Centrelink and Medicare.
Warning that the IT overhaul had cost “a lot of money”, Mr Hockey said there were still delays for people trying to get information about their welfare payments or Medicare rebates. “It takes 17 minutes on average for Centrelink to answer a phone call, despite their best endeavours,” he said. “When we were last in Government it was seven minutes.” The warnings suggest a worse-than-expected Budget position will be revealed when the Government releases its Mid-Year Economic and Fiscal Outlook next week
SDL Price at posting:
3.7¢ Sentiment: Buy Disclosure: Held
