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Australian Government Coat of Arms

Budget | 2015-16

Budget 2015-16
Australian Government Coat of Arms, Budget 2015-16

Frequently Asked Questions

The Australian Government budget sets out the economic and fiscal outlook for Australia, and includes expenditure and revenue estimates for the current financial year, the budget year, and three forward financial years. It shows the Government's social and political priorities, and how the Government intends to achieve these.

The Government's budget strategy?

Budget Paper No. 1 Statement 3 details the Government's current medium-term fiscal strategy.

The total size of the budget?

Budget Paper No. 1 Statement 4 and Statement 5 provide details of estimated total Australian Government revenue and expenses for the Budget.

The current budget surplus, deficit or balance?

The estimated surplus, deficit or balance for the current Budget can be found in Budget Paper No. 1 Statement 3 .

Where taxpayers' money is spent?

Appendix B of the Budget Overview outlines categories of Government expenditure. A more detailed analysis can be found in Budget Paper No. 1 Statement 5.

Details of the distribution of funds within each portfolio can be found in the Portfolio Budget Statements.

How much revenue the Government receives from various sources?

Appendix B of the Budget Overview summarises where Australian Government revenue comes from. A more detailed analysis can be found in Budget Paper No. 1 Statement 4.

Forecasts of GDP, CPI, the unemployment rate and the current account balance?

Budget Paper No. 1 Statement 2 contains forecasts of key economic variables such as GDP, CPI, the unemployment rate and the current account balance.

Payments to the States?

Budget Paper No. 3 provides details of Australian Government payments to the States.

Australian Government debt?

Budget Paper No. 1 Statement 6 includes a Debt Statement, detailing the current and projected debt on issue.

Historical data and estimates of the Australian Government's net debt can be found in Budget Paper No. 1 Statement 10, under the Australian Government general government sector net debt and net interest payments table.

Australian Government net worth and net financial worth are also shown in Budget Paper No. 1 Statement 10.

Budget Paper No. 1 Statement 3 also discusses key balance sheet aggregates including net financial worth.

Historical data on Australian Government spending?

Historical data on Australian Government spending and payments can be found in Budget Paper No. 1 Statement 10.

The MYEFO updates the economic and fiscal outlook from the previous budget. Clause 14 of the Charter of Budget Honesty requires the release of a MYEFO each year by the end of January, or six months after the last budget, whichever is later.

Refer to the Mid‑Year Economic and Fiscal Outlook page for further information.

The purpose of the PBS is to inform Senators and Members of Parliament of the proposed allocation of resources to government outcomes by agencies within the relevant portfolio. Agencies receive resources from the annual appropriations acts, special appropriations (including standing appropriations and special accounts), and revenue from other sources.

Refer to the Portfolio Budget Statements page for further information.

The purpose of the PAES, like that of the Portfolio Budget Statements, is to inform Senators and Members of Parliament and the public of the proposed allocation of resources to government outcomes by agencies within the relevant portfolio.

Refer to the Portfolio Additional Estimates Statements page for further information.

The purpose of the PSAES is to inform Senators, Members of Parliament and the public of the proposed allocation of additional resources to Government outcomes by agencies within the relevant portfolio.

Refer to the Portfolio Supplementary Additional Estimates Statements page for further information

The purpose of the PSES is to inform senators and members of parliament and the public of the proposed allocation of supplementary appropriations to Government outcomes by agencies within the relevant portfolio.

Refer to the Portfolio Supplementary Estimates Statements page for further information.

The following steps are taken in the lead up to the presentation of the budget to Parliament.

Pre-budget Submissions: The Treasurer issues a press release calling for pre-budget submissions from interested parties.

Pre-budget Expenditure Review Committee (ERC): At Pre-budget ERC, portfolio ministers' new proposals and expected major pressures on agency budgets are considered, and priorities for the coming budget are established.

Portfolio Budget Submissions: To seek funding for new policy proposals, agencies prepare Portfolio Budget Submissions based on the outcome of pre-budget ERC. The submissions outline all major proposals that agencies wish to have funded and potential savings.

Expenditure Review Committee (ERC): This sub‑committee of Cabinet is primarily responsible for developing the Budget against the background of the Government's political, social and economic priorities. It decides which of the agencies' proposals will be funded and by how much.

Budget Cabinet : This is the final stage in the decision‑making process. Decisions from the ERC are endorsed and the Budget Cabinet agrees to present the Budget to Parliament.

Budget Night: On Budget Night, the Government presents the Budget Papers and budget‑related documents. The Treasurer summarises the budget in his Budget Speech, which is traditionally presented at 7.30 pm on the second Tuesday in May (Budget Night).

Final Budget Outcome (September): The Charter of Budget Honesty Act 1998 requires that a Final Budget Outcome be released no later than three months after the end of the relevant financial year. The financial statements in the Final Budget Outcome are similar to those in the budget but provide actual outcomes rather than estimates.

Mid-Year Economic and Fiscal Outlook (MYEFO): The MYEFO must be released by the end of January, or six months after the Budget is handed down, whichever is later. The role of a MYEFO is explained above.

Pre-Election Fiscal Outlook (PEFO): The Charter of Budget Honesty Act 1998 requires that a PEFO be released in election years. The purpose of the PEFO is to update information on the economic and fiscal outlook before an election. A PEFO must be released publicly within 10 days of the issue of the writs for a general election, and must contain: spending and revenue estimates for the current and following three financial years; the assumptions underlying the estimates; the sensitivity of the estimates to changes in assumptions; and risks that might change the fiscal outlook materially. The last PEFO was released on 13 August 2013.

Updated Economic and Fiscal Outlook (UEFO): Should the Government consider that changes in economic conditions and/or its fiscal strategy warrant an update of its economic forecasts and key budget aggregates, the Government may publish an update. A UEFO was published on 3 February 2009.

Economic Statement: The Government may release an Economic Statement to provide an update of its economic forecasts and key fiscal aggregates. The last Economic Statement was released 2 August 2013.

A budget surplus occurs when the funds the Government receives from taxation and other revenue exceeds Government spending in any financial year. Information on the Budget aggregates can be found in Budget Paper No. 1 Statement 3 .

A budget deficit occurs when Government spending exceeds the funds the Government receives from taxation and other revenue in any financial year. Information on the Budget aggregates can be found in Budget Paper No. 1 Statement 3 .

The Parliament has the ultimate control over government finances. Section 83 of the Constitution of Australia states:

No money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law.

This means that money cannot be spent unless the Parliament has authorised the expenditure through an Act of Parliament. These Acts of Parliament are more commonly known as Appropriation Acts and are accounted for in Budget Paper No. 4.

There are two broad categories of appropriation: annual appropriations and special appropriations. Annual appropriation bills are passed regularly each financial year to provide funds for government and parliamentary expenditure. Special appropriation bills are for a specific purpose, for example, to finance a particular program or project set up by the bill.

The Budget presents three different appropriation bills. Appropriation Bill (No. 1) provides government agencies with funding for the ordinary services of Government. Appropriation Bill (No. 2) provides agencies with funds for capital injections, grants to the States and Territories and administered funding for new agency outcomes. The Appropriation (Parliamentary Departments) Bill provides separate funding for Parliament.

More information on Appropriations can be found in the introduction to Budget Paper No. 4.

The Reserve Bank of Australia (RBA) provides specialised banking services to the Australian Government. A facility is provided to the Australian Government that is used to manage a group of bank accounts, known as the Official Public Account (OPA) Group, the aggregate balance of which represents the Government's daily cash position. Information on the role and function of the RBA in managing the Government's money can be found at www.rba.gov.au.

The Australian Office of Financial Management (AOFM) is responsible for the management of the Government's cash balance. Information on the role and functions of the AOFM can be found at www.aofm.gov.au.

The collection of GST revenue is administered by the Australian Taxation Office. While GST is a tax on a national base, all GST revenue collected is received by the States and Territories (States). As agreed by all States, the Commonwealth Grants Commission (CGC) makes recommendations as to the distribution of the GST revenue between the States and Territories.

The CGC's recommendations are based on the principle of Horizontal Fiscal Equalisation to ensure that if each made the same effort to raise revenue from its own sources and operated at the same level of efficiency, each would have the capacity to provide services at the same standard. However, States can spend their GST revenue according to their own budget priorities.

The CGC recommends relativities for the distribution of GST that are applied to state populations to determine a weighted population for each State. The Australian Government uses the weighted populations to distribute the GST revenue pool.

For further information on GST revenue provision to the States see Budget Paper No. 3 Federal Financial Relations, or the CGC website.

The majority of Government revenue is earned from different types of tax. However, the Commonwealth also receives revenue from dividends, interest, and sales of goods and services. Budget Paper No. 1 Statement 5 details Government revenue.

The Government's decisions on new spending and savings initiatives are referred to in the Budget papers as "measures". Budget Paper No. 2 – Budget Measures 2015-16 contains all revenue, expense and capital measure descriptions.

In addition, the Budget Overview summarises major Government initiatives and programs.

The Australian Bureau of Statistics provides detailed information on GDP, CPI and other key economic statistics. Refer to the Australian Bureau of Statistics website for further information.

The Australian Taxation Office (ATO) provides detailed information on taxation, including personal income tax rates and thresholds. Refer to the Australian Taxation Office website for further information.