Part 3: Fiscal outlook

Overview

The Australian Government’s underlying cash surplus for 2005-06 is estimated to be $11.5 billion, an improvement on the 2005-06 Budget forecast. In accrual terms, a fiscal surplus of $10.4 billion is estimated for 2005-06, an improvement of $3.0 billion on the 2005-06 Budget forecast. The fiscal outlook is for continuing underlying cash and fiscal surpluses in the forward years.

Table 5: Australian Government general government sector budget aggregates^(a)(b)

1. 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.
2. Budget estimates, including the per cent of GDP, are as published in Budget Paper No. 1, Budget Strategy and Outlook 2005-06.
3. For the 2005-06 MYEFO, 2006-07 has moved from a projection to an estimates year.
4. Excludes expected Future Fund earnings.

Table 6 provides a reconciliation of the fiscal balance estimates between the 2005-06 Budget and the Mid‑Year Economic and Fiscal Outlook 2005-06 (MYEFO).

Table 6: Reconciliation of general government sector fiscal balance estimates^(a)

1. A positive number for revenue indicates an increase in the fiscal balance, while a positive number for expenses and net capital investment indicates a decrease in the fiscal balance.
2. Excludes the public debt net interest effect of policy measures.

The estimates for 2005-06 and 2006-07 are constructed using the 2004-05 outcomes, year-to-date results and an updated economic outlook. However, the projection years — 2007-08 and 2008-09 — are based mainly on underlying trends in economic parameters and no account is taken of cyclical influences on economic activity.

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