Deloitte Access Economics has prepared detailed analysis for the Business Council of Australia, which shows how commodity prices have already fallen to a level which, at the beginning of this decade, Treasury did not think they would reach before 2020 (see next chart).
It also shows how the Budget deficit could be $76 billion higher than forecast over the next four years in the event that the terms-of-trade falls back to its long-run average (see next chart), or $114 billion worse-off if the terms-of-trade fall is accompanied by a slowdown in the real economy.
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