2003-04 Mid-Year Economic and Fiscal Outlook

MID-YEAR ECONOMIC AND FISCAL OUTLOOK

2003-04

STATEMENT BY

THE HONOURABLE PETER COSTELLO, M.P.
TREASURER OF THE COMMONWEALTH OF AUSTRALIA,

AND

SENATOR THE HONOURABLE NICK MINCHIN
MINISTER FOR FINANCE AND ADMINISTRATION

December 2003

ISBN 0 642 74222 7

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth available from the Department of Communications, Information Technology and the Arts. Requests and inquiries concerning reproduction and rights should be addressed to:

The Commonwealth Copyright Administration
Intellectual Property Branch
Department of Communications, Information Technology and the Arts
GPO Box 2154
CANBERRA ACT 2601

Or posted at:

http://www.dcita.gov.au/cca

Internet

The Australian Government budget papers and budget related information are available on the central Budget website at: www.budget.gov.au.

Printed by CanPrint Communications Pty Ltd

Foreword

The 2003-04 Mid-Year Economic and Fiscal Outlook (MYEFO) has been prepared in accordance with the Charter of Budget Honesty Act 1998. The Charter requires that the Government provide a mid-year budget report, which provides updated information to allow the assessment of the Government's fiscal performance against its fiscal strategy.

Consistent with these requirements:

Part 1: Overview — contains summary information on the key fiscal and economic indicators.
Part 2: Economic outlook — discusses the domestic and international economic forecasts that underpin the budget estimates.
Part 3: Fiscal outlook — provides a discussion of the budget outlook and a summary of the factors explaining variations in the operating statement, balance sheet and cash flow statement since the 2003-04 Budget. This part also discusses the sensitivity of the forward budget estimates to changes in economic and other parameters.
Appendix A: Policy decisions taken since the 2003-04 Budget — provides details of decisions taken since the 2003-04 Budget that affect revenue, expenses and capital estimates.
Appendix B: Government Finance Statistics Statements — provides the general government and consolidated whole of government financial statements on a GFS basis, consistent with the accrual Uniform Presentation Framework.
Appendix C: AAS Financial Statements — provides AAS31 statements and notes to the financial statements.
Appendix D: Statement of Risks — provides details of general developments or specific events that may have an impact on the fiscal position.
Appendix E: Financial reporting standards and budget concepts — provides a discussion of key budget concepts relevant to the MYEFO and the external reporting standards upon which the MYEFO is based.
Appendix F: Historical fiscal data — provides historical data for the Australian Government's key fiscal aggregates.

Foreword

Part 1: Overview

Domestic and international economic outlook

Part 2: Economic Outlook

Risks to the outlook
International economic outlook
Domestic forecasts

Part 3: Fiscal Outlook

Overview
Revenue
Expenses
Net capital investment
Cash flows
Net debt and net worth
Attachment A: Reporting standards
Attachment B: Budget financial statements
Attachment C: Sensitivity of fiscal aggregates to economic developments
Attachment D: Tax Expenditures
Attachment E: Supplementary expense tables and the Contingency Reserve

Appendices

Appendix A: Policy decisions taken since the 2003-04 Budget
Appendix B: Government Finance Statistics Statements
Appendix C: AAS Financial Statements
Appendix D: Statement of Risks
Appendix E: Financial Reporting Standards and Budget Concepts
Appendix F: Historical fiscal data

Notes

The following definitions are used in the MYEFO:

– 'real' means adjusted for the effect of inflation;

– real growth in expenses is measured by the non-farm Gross Domestic Product (GDP) deflator;

– one billion is equal to one thousand million; and
– the budget year refers to 2003-04, while the forward years refer to 2004-05, 2005-06 and 2006-07.

Figures in tables and generally in the text have been rounded. Discrepancies in tables between totals and sums of components are due to rounding:

– estimates under $100,000 are rounded to the nearest thousand;

– estimates $100,000 and over are generally rounded to the nearest tenth of a million;

– estimates midway between rounding points are rounded up; and
– the percentage changes in statistical tables are calculated using unrounded data.

For the budget balance, a negative sign indicates a deficit while no sign indicates a surplus.
The following notations are used:

*	The nature of this measure is such that a reliable estimate cannot be provided.
NEC/nec	not elsewhere classified
-	nil
..	not zero, but rounded to zero
na	not applicable (unless otherwise specified)
nfp	not for publication
$m	$ million
$b	$ billion

References to the 'States' or 'each State' include the Territories, because from 1993-94 onwards, general purpose funding has been on the same basis for all jurisdictions. The Australian Capital Territory and the Northern Territory are referred to as 'the Territories'. The following abbreviations are used for the names of the States, where appropriate

NSW - New South Wales

VIC/Vic - Victoria

QLD/Qld - Queensland

WA - Western Australia

SA - South Australia

TAS/Tas - Tasmania

ACT - Australian Capital Territory

NT - Northern Territory