Responsible Budget repair

The best defence against uncertainty overseas is a responsible Budget at home.

Structural pressures on the Budget

Growth in spending on essential services and the higher costs of debt are placing long‑term pressure on the Budget

The Government inherited a significant and intensifying fiscal challenge, with a budget burdened by one trillion dollars in gross debt and deficits projected for at least the next decade.

We face growing pressures with interest payments and essential services – such as the National Disability Insurance Scheme, hospitals, aged care, medical benefits, age pension and defence – growing faster than the economy. These spending pressures have become even more pronounced since the election.

Managing the Budget responsibly

Delivering Budget restraint and economic resilience

The immediate focus of the Government's Economic and Fiscal Strategy is to ensure that we avoid adding to inflationary pressures in the economy. We also begin the hard task of responsible budget repair with $28.5 billion in Budget improvements including by:

  • restraining spending during the period of high inflation, and returning almost all of the improvements in tax receipts to the budget
  • improving the quality of spending, and making investments that grow the economy and expand its productive capacity
  • responsible savings and unwinding wasteful and duplicative spending
  • improving the integrity and fairness of the tax system.

Improving the quality of spending and reducing waste

The Government Spending Audit provides an ongoing approach to Budget discipline. It begins the process of Budget repair by:

  • cutting $3.6 billion in outsourcing expenses on external contractors, consultancies, advertising, travel and legal expenses
  • redirecting spending towards higher quality and higher priority initiatives
  • better aligning and redirecting some infrastructure investment so it can be delivered responsibly and sustainably.

Making the tax system fairer

The Government is closing tax loopholes to ensure multinationals pay their fair share of tax in Australia and improving integrity through higher levels of tax compliance. This includes:

  • a multinational tax integrity package which raises around $1 billion over 4 years 
  • extending compliance programs for tax avoidance, shadow economy and personal income tax, raising $3.7 billion over 4 years 
  • working with the international community to reform the international corporate tax system to better address the challenges arising from digitalisation and globalisation. 

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