Fiscal outlook
The Government has achieved the fiscal strategy for the 2008‑09 Budget that it promised the Australian people. The 2008‑09 Budget:
- delivers a budget surplus of 1.8 per cent of GDP, up from the 1.2 per cent surplus forecast in the Pre‑Election Economic and Fiscal Outlook 2007 (2007 PEFO);
- banks all tax receipt windfalls since the election, adding $3.0 billion to the surplus in 2008‑09;
- reins in growth of new spending in 2008‑09 to 1.1 per cent in real terms, the lowest rate of growth in nine years. This has been achieved by reprioritising spending so that all new spending in 2008‑09 on election commitments and other priorities is offset by spending cuts;
- achieves total cash savings of $7.3 billion from spending cuts and revenue measures in 2008‑09 and $33.3 billion over four years, that more than offset new measures over the four years;
- reprioritises spending to achieve the Government's promise to deliver for working families and to meet the Government's commitment to Australia's future by addressing education, infrastructure, health and hospital needs; and
- reduces taxation as a share of GDP from 24.7 per cent in 2007‑08 to 23.8 per cent in 2008‑09.
An underlying cash surplus of $21.7 billion is expected in 2008‑09 compared with an estimated surplus of $14.3 billion at the 2007 PEFO. In accrual terms, a fiscal surplus of $23.1 billion is estimated for 2008‑09 compared to $13.6 billion at 2007 PEFO. The fiscal outlook is for continuing underlying cash and fiscal surpluses in the forward years.
Table 2: Budget aggregates
- The 2006‑07 figures have been adjusted to reflect the recognition of GST as an Australian Government tax.
Source: Data are for the Australian Government general government sector, sourced from Statement 9.
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