Statement 2: Fiscal Outlook

This statement summarises the main budget aggregates for the Commonwealth general government sector.

The fiscal outlook is sound, with underlying cash surpluses continuing to be forecast for 2002-03 and 2003-04 and across the forward estimates. These surpluses accommodate responsible reductions in personal income tax and new policy spending in the high priority areas of defence, domestic security, health and education.

With the budget remaining in surplus and interest rates remaining low, further reductions in net debt and net interest payments are expected.

The fiscal outlook for 2003-04 and beyond remains sound, with underlying cash surpluses projected over the forward estimates period. These surpluses accommodate responsible reductions in personal income tax and new spending in high priority areas.

Budget aggregates

After the delivery of personal tax cuts of $2.4 billion, an underlying cash surplus of $2.2 billion is now expected in 2003-04 compared with an estimated $4.9 billion at the Mid-Year Economic and Fiscal Outlook 2002-03 (MYEFO). Underlying cash surpluses continue to be projected across the forward estimates.

In accrual terms, the fiscal balance estimates have also been revised downwards since MYEFO. A fiscal surplus of $0.7 billion is now forecast for 2003-04.

Table 1: Commonwealth general government budget aggregates^(a)

Table 1: Commonwealth general government budget aggregates(a)

All estimates are based on Government Finance Statistics (GFS) standards, but with goods and services tax (GST) revenue collected on behalf of the States and Territories netted off revenue and expenses.