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Petrol at 3-month low; Budget deficit shrinksMonthly Budget statement; Credit & debit card lending; Weekly petrol
Budget improves: In the twelve months to December 2017, the Budget deficit stood at $22.1 billion (around 1.3 per cent of GDP) – the lowest rolling annual deficit for over four years.
Credit & debit cards: The average credit card balance was $3,170.40 in December, up 0.1 per cent on the year. The number of credit and debit transactions hit record highs.
Petrol: According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol fell by 2.3 cents to a 3-month low of 134.4 cents a litre in the past week. The Singapore gasoline price has recorded the biggest weekly fall in a year. 
What does it all mean?
The Federal Budget is currently in a stronger position than the government’s finance boffins have estimated. In fact the rolling average underlying deficit is the smallest in four years. The good news is that improvement is coming from both sides of the balance sheet. Add in the fact that GST revenues are at record high with annual growth the fastest in a year and the fiscal situation is positive.
One beneficiary of the sharemarket volatility is the motorist. The Singapore gasoline prices fell by 5.2 per cent last week in Australian dollar terms, potentially slicing around 5 cents off the local pump price. Currently the national petrol price is at 3-month lows.
Aussies aren’t yet showing signs of tiring in the use of plastic cards with the average use of both credit and debit cards at record highs. The value of cash and plastic card transactions rose by a healthy 5.7 per cent in December compared with a year earlier.
What do the figures show?
In the twelve months to December 2017, the Budget deficit stood at $22.1 billion (around 1.3 per cent of GDP) – the lowest rolling annual deficit for over four years.
Smoothed revenues (twelve months to December) were up 7.1 per cent on a year ago – the fastest growth in 4½ years. Expenses rose by 3.8 per cent over the same period, the slowest growth in 10 months
The Department of Finance noted: “The net operating balance for the year to 31 December 2017 was a deficit of $16,185 million, which is $2,584 million lower than the 2017- 18 MYEFO profile deficit of $18,769 million. The difference primarily results from higher than expected revenue and lower expenses.”
In terms of the underlying cash balance, “The underlying cash balance for the financial year to 31 December 2017 was a deficit of $21,948 million, which is $1,916 million lower than the 2017-18 MYEFO profile deficit of $23,864 million.”
Receipts: “Total receipts were $2,043 million higher than the 2017-18 MYEFO profile.”
Payments: “Total payments were $192 million lower than the 2017-18 MYEFO profile.”
The Government currently expects an underlying deficit of $23.6 billion for 2017/18.
Receipts from the Goods and Services Tax stood at a record $65 billion in the twelve months to December, up 5.9 per cent on a year ago, the fastest pace in a year. The Government has forecast GST receipts of $65.56 billion for the entire 2017/18 year.
Actual GST receipts for the six months to December stood at $33.0 billion, just above the Budget ‘profile’ of $32.55 billion.
Credit & debit card lending:
The average credit card balance recorded a seasonal increase of $42.80 to $3,170.40 in December. The average balance was up just 0.1 per cent over the year. In smoothed terms (12 month average) the average balance was down by 0.2 per cent.
Of credit cards attracting interest charges, the average outstanding balance rose by $6.10 in December to $1,903.30. The average balance accruing interest was down by 0.6 per cent on a year ago. In smoothed terms (12 month average) the average balance was down by 1.7 per cent on a year ago.
The average credit card limit rose by $6.10 to $9,149 in December to be up 1.0 per cent over the year.
Usage of credit card limits stood at 34.7 per cent in December – the highest level in 10 months.
The number of credit card accounts stood at 16.695 million in December; up 0.1 per cent over the year.
The number of debit card accounts stood at 46.479 million in December; up 4.0 per cent over the year.
The number of ATM transactions in December were down 5.0 per cent over the year. Transactions have been consistently falling in annual terms for over five years.
The number of debit card purchases in December were 14.1 per cent higher than a year ago with the value up 8.8 per cent.
In December a record 14.9 transactions were made on credit cards (on average) with a record 11.5 transactions made on debit cards.
Petrol prices
According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol fell by 2.3 cents to a 3-month low of 134.4 cents a litre in the past week. The metropolitan petrol price declined by 3.0 cents to 132.5 cents per litre and the regional price decreased by 0.8 cents to 138.4 cents per litre.
Average unleaded petrol prices across states and territories over the past week were: Sydney (down by 2.3 cents to 124.5 c/l), Melbourne (down by 7.3 cents to 133.4 c/l), Brisbane (down by 9.3 cents to 132.3 c/l), Adelaide (up by 15.5 cents to 137.2 c/l), Perth (up by 0.1 cents to 137.5 c/l), Darwin (down by 0.5 cents to 149.4 c/l), Canberra (unchanged at 148.4 c/l) and Hobart (down by 0.2 cents to 146.3 c/l).
The national average Australian price of diesel petrol rose by 0.1 cents to 139.1 cents per litre. The metropolitan price was unchanged at 139.8 c/l and the regional average price rose by 0.1 cents to 138.6 c/l.
Today, the national average wholesale (terminal gate) unleaded petrol price stands at 125.4 cents a litre, up by 1.0 cent over the week. The terminal gate diesel price stands at 126.4 cents a litre, down by 0.2 cents over the past week.
Last week the key Singapore gasoline price fell by US$6.45 or 7.8 per cent to US$76.25 a barrel. In Australian dollar terms the Singapore gasoline price last week fell by $5.39 or 5.2 per cent to $98.02 a barrel or 59.01 cents a litre – a 7-week low. 
MotorMouth records the following average retail prices for capital cities today: Sydney 124.4c; Melbourne 129.9c; Brisbane 127.5c; Adelaide 147.1c; Perth 127.8c; Canberra 148.4c; Darwin 149.2c; Hobart 146.0c.
What is the importance of the economic data?
The Department of Finance releases the Government Financial Statements (Niemeyer Statement) almost every month. The statement allows investors to track the current Budget position and provides insights into the effectiveness of fiscal policy.
The Reserve Bank releases data on credit and debit card transactions each month. The credit card figures are useful in highlighting consumer borrowing and spending trends.
Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory’s metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.
What are the implications for interest rates and investors?
The Federal Budget continues to surprise – in a positive way. Revenue growth is driving the improvement with growth of annualised revenues the fastest in over four years.
Petrol prices have eased to 3-month lows and have potential to fall further. If petrol prices do continue to decline, it will boost spending power, in addition to keeping inflation and interest rates low.
The best guides to the amount of spending in the economy are plastic card transactions and the amount of GST being collected. Both are growing at a near 6 per cent annual rate, above the 3.5 per cent combined total of inflation and population growth.
Originally published by Craig James, Chief Economist, CommSec