Next year’s economic outlook risky

THERE are significant economic risks that can erode the economic outlook and revenue projections for next year.
Mindful of the global economic recession and the resultant commodity price falls and continued volatility, the Government is planning a cautious money plan for next year.
A further major risk factor is the LNG project, which is yet unsigned into a fully-fledged project at the time the budget is presented.
The budget is premised on the basis that the project commences construction phase next year which is contingent on the licence-based benefits sharing agreement talks currently underway being concluded successfully.
If the project does not proceed as expected, the Government expects a significant negative impact on business confidence, the economy and upon revenue.
The budget is framed upon the expectation that there will be no significant disruptions to major mining and petroleum projects.
Past experience suggests that such expectation can be misplaced due to strikes and landowner disruptions.
Weather related disruptions are a very real risk as well.
The Government budget strategy paper suggests that it is aware of risks that could arise through PEA wage agreements due next year, the Defence and Police wage rise agreements, doctors and nurses wage issues and other union-related wage concerns.