Statement 1: Budget Overview
The 2013‑14 Budget improves the sustainability of Australia's public finances, supports jobs and growth, and makes room for critical investments in our nation's future.
The Government has maintained fiscal restraint while delivering on historic economic and social reforms and nation building infrastructure. The National Plan for School Improvement provides a once‑in‑a‑generation reform to Australia's school funding arrangements. The establishment of DisabilityCare Australia, one of the biggest social reforms in our history, will help ensure that Australians with significant and permanent disability get the support they need. These investments have been fully offset to 2023‑24 and beyond.
The Australian economy is expected to undergo two large and important transitions over the forecast period. Following the largest investment boom in Australia's history, the resources boom will shift from the investment phase toward exceptional growth in production and exports. More broadly, the economy will move to non‑resource drivers of growth.
The economy starts these transitions from a position of impressive resilience, with an outlook of solid economic growth, low unemployment and contained inflation. However, the unusual combination of a sustained high Australian dollar and falling commodity prices is putting acute pressure on prices and corporate profitability across the economy.
Weaker corporate profitability has had a significant impact on the level of company tax receipts expected in 2012‑13 and over the forward estimates. Lower than expected capital gains tax and resource rent taxes have compounded the fall in company tax receipts. Since the 2012‑13 Budget, tax receipts have been revised down by around $17 billion in 2012‑13. This brings the total write‑downs in tax receipts over the five years since the 2008‑09 Budget to around $170 billion. Since the 2012‑13 Mid‑Year Economic and Fiscal Outlook, tax receipts have been revised down by around $60 billion over the four years to 2015‑16.
Significant revenue write‑downs will see a budget deficit of $18.0 billion in 2013‑14, with the Government charting a sensible pathway to surplus over the forward estimates. The Government's fiscal strategy is currently expected to return the budget to balance in 2015‑16 and surplus in 2016‑17, before most of the developed world.
A more gradual return to surplus is appropriate given significant downgrades to revenue and the transitions underway in the economy. Attempting to return to surplus too quickly by making drastic cuts in the near term would come at a significant cost to jobs and growth.
Instead, the Government has chosen a sensible pace of consolidation, consistent with maintaining solid growth and low unemployment. Along with historic economic and social reforms, this Budget will make Australia stronger, smarter and fairer.
Note: Where possible, Budget documents are available in HTML and for downloading in Portable Document Format(PDF). If you require further information on any of the tables or charts on this website, please contact The Treasury.