Credible path to surplus
The deficit will reduce each and every year despite major revenue write‑downs
The Government has already made considerable progress in improving the budget position.
Over the last year, the budget has been significantly impacted by the iron ore price almost halving and persistently weak wage growth.
Tax receipts have been downgraded by $52 billion since the 2014 Budget. Over $20 billion of these write-downs have been directly as a result of the fall in the iron ore price.
Despite this, the annual average pace of consolidation remains at 0.5 per cent of GDP over the forward estimates – broadly similar to what was in the 2014 Budget.
The size of Government, measured by the size of payments to GDP, reduces from 25.9 per cent in 2015‑16 to 25.3 per cent by the end of the forward estimates.
And the deficit reduces each and every year from $35.1 billion in 2015‑16 to $6.9 billion in 2018‑19.
New spending in this Budget meets the Government’s commitment to redirect funding to investments that boost Australia’s productivity and participation.
This Budget carefully balances the need for investment to enhance Australia’s prosperity with the need to repair the budget in a responsible and fair way.
Nevertheless, there is more work to do to continue budget repair in the medium term and the Government remains committed to returning the budget to surplus as soon as possible.