The Treasurer has delivered a bigger than expected budget surplus of $15.8 billion, in large part due to reduced government spending. That's six billion dollars more than the last forecast.
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00:00We have a budget that has had some spending deferred. There are a bunch of payments that
00:07would normally go to the states or other partners that haven't been spent for various reasons,
00:13perhaps some deadlines weren't met or agreements that were anticipated to have been reached
00:18haven't been reached. So there's a few billion dollars in deferred payments that are likely
00:22to be spent in this financial year instead. There's also less take up of some government
00:27programs than anticipated, some in the areas of aged care, some in some COVID vaccine programs,
00:33for example. So generally, that's where the less government spending has come from. There's
00:38also been less revenue coming in as well, particularly when it comes to company tax.
00:44That's been down a little bit over the course of the last financial year than what had been
00:49originally anticipated. But the Treasurer Jim Chalmers has been at pains to say that
00:54it is the reduced government spending that has made the difference to the budget bottom
00:57line for the 23-24 financial year and wanting to credit those actions with the outcome they've
01:04been able to deliver.
01:06It's really important to recognise that this surplus is bigger at the end of the financial
01:11year than we anticipated in May, not because taxes are higher, but because spending is
01:17lower. Spending in the last financial year was much lower than anticipated at budget
01:23and revenue was lower as well. Spending was down by almost by around twice as much as
01:29revenue was down. So this bigger surplus is not because we taxed more. It's because we
01:35spent less. And that's an important thing to recognise.
01:40I think it was 06, 07 and 07, 08 financial year. So back in the Howard government, since
01:45we last had two back to back budget surpluses. Look, the coalition government came close
01:50prior to the pandemic, famously declaring that it had gotten the budget back into surplus.
01:56But then the COVID pandemic hit, which with the amount of government spending there to
02:00support jobs and economic activity meant that a budget surplus had been pushed off into
02:05the distance. So it's certainly notable that the federal government has been able to get
02:09a surplus in place. But it's also worth noting that it's not going to stay this way for a
02:16while. It's not as if the situation has changed so much that we'll be posting surpluses from
02:21here for many years forward and continue to pay down debt. There's been some debt paid
02:26down now, but we are anticipating the budget to go back into the deficit for this financial
02:32year and the following financial years because there's still enormous spending programs that
02:38are in place, things like aged pension, NDIS, aged care. There's still a lot of demand for
02:43government services. We haven't had any major tax reform beyond income tax cuts in recent
02:49time. So the broader picture of budget repair remains one that will need to be addressed
02:55in coming years.