Responsible economic management has been a hallmark of the Albanese government since day one, and there’s no clearer proof than the 2 straight surpluses we’ve delivered.
These consecutive surpluses were confirmed in the Final Budget Outcome (FBO) for 2023-24, which Finance Minister Katy Gallagher and I released this week.
This is the first time a government has delivered back‑to‑back surpluses in nearly 2 decades. In dollar terms, they are the biggest consecutive surpluses on record.
These surpluses are helping to pay down debt and they are helping in the fight against inflation.
They are building our fiscal buffers at a time of global volatility and uncertainty.
And they have been achieved while we’ve rolled out responsible cost‑of‑living relief, made important investments in future growth and funded other pressing priorities.
This week’s FBO showed that the underlying cash balance for 2023-24 was a surplus of $15.8 billion, or 0.6 per cent of GDP.
This followed a $22.1 billion surplus the year before, which was 0.9 per cent of GDP.
For the year just gone, the budget position has improved by $72.3 billion compared to what we inherited, and the surplus is $6.4 billion bigger than the budget forecasts in May.
The bigger surplus relative to the budget forecasts was entirely due to lower government spending, not higher revenue.
In fact, tax receipts were down by $5.3 billion, but payments were down by $10.2 billion.
This reflects the type of responsible economic management and spending restraint that has seen us engineer a historic turnaround in the budget position since coming to office.
Across our first 2 years in government, the Commonwealth’s budget position has improved by $172.3 billion in comparison to what we inherited from our predecessors.
This is the biggest nominal improvement in the budget in a parliamentary term.
Our critics will attempt to diminish and downplay this result, but the truth is, if we took the same approach as our predecessors, we wouldn’t have delivered either of our back‑to‑back surpluses.
We have returned 87 per cent of upwards revisions to revenue since coming to government. Our predecessors only returned around 40 per cent.
Real payments in 2023-24 grew by 2.9 per cent, which is much lower than the 4.1 per cent average under the previous Liberal government.
And we’ve found $77.4 billion in savings and re‑prioritisations, including $12.2 billion in 2023-24, which compare to zero savings in the last budget of our predecessors.
A surplus is not an end in itself, it’s an important way to pay down debt, take pressure off inflation and build better foundations for a stronger economy.
Because of our efforts, gross debt was $149.1 billion lower in 2023-24 than forecast at the election, which means we avoid around $80 billion in interest costs over the decade.
Our 2 surpluses are also helping in the fight against inflation, as the Reserve Bank Governor has acknowledged.
As we saw last week, monthly inflation is less than half of what we inherited and less than a third of its peak, and underlying inflation fell to its lowest rate in more than 30 months.
At the same time, we’ve rolled out meaningful cost‑of‑living relief including tax cuts for every taxpayer, and some of our policies have directly contributed to this lower inflation result, including energy bill relief, increases to rent assistance and cheaper childcare.
We’ve also ensured our surpluses haven’t come at the expense of important investments in things like Medicare, housing, the net zero transformation or national security.
We’re proud of the substantial improvement in the budget on our watch, but we’re not getting ahead of ourselves or pulling out the back‑in‑black mugs.
Structural pressures on the budget are intensifying rather than easing.
That’s why we’ve taken decisive action to address some of the biggest structural spending pressures on the budget.
We’ve made important reforms to the NDIS and the aged care system, and by reducing the debt we inherited, we have avoided billions of dollars in interest payments.
Our fiscal strategy is striking the right balance between fighting inflation, providing cost‑of‑living relief, supporting growth and strengthening public finances.
We are repairing the budget without hurting an already weak economy, putting people under more pressure or ignoring urgent and unavoidable spending.
There is more work to do, but whether it’s back‑to‑back surpluses, record job creation, moderating inflation or a return to real wages growth, we are making meaningful progress.
It’s a testament to the responsible economic management of the Albanese government and the efforts of workers, businesses and communities right across Australia.
