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Australian Government Coat of Arms

Budget | 2014-15

Budget 2014-15
Australian Government Coat of Arms, Budget 2014-15

Budget Paper 1 — Statement 3 — Chart Data

Chart 1: Improvement of $43.8 billion to the budget position since the 2013‑14 MYEFO in the four years to 2017‑18

This chart shows the change in the underlying cash balance (UCB) estimates since the 2013‑14 MYEFO. While the UCB decreases by $2.9 billion in 2013‑14, from 2014‑15 to 2015‑16 the UCB improves in each year by $4.1 billion, $7.0 billion and $7.1 billion respectively. The UCB has also improves by $25.6 billion in 2017-18 compared to the meditum term projection for that year in the 2013-14 MYEFO.

Note: The starting point for 2017‑18 was a deficit of $28.4 billion.

This chart shows the change in the underlying cash balance (UCB) estimates since the 2013‑14 MYEFO. While the UCB decreases by $2.9 billion in 2013‑14, from 2014‑15 to 2015‑16 the UCB improves in each year by $4.1 billion, $7.0 billion and $7.1 billion respectively. The UCB has also improves by $25.6 billion in 2017‑18 compared to the medium term projection for that year in the 2013‑14 MYEFO.

Data - Chart 1: Improvement of $43.8 billion to the budget position since the 2013‑14 MYEFO in the four years to 2017‑18
X Values Difference
2013‑14 ‑2.9
2014‑15 4.1
2015‑16 7.0
2016‑17 7.1
2017‑18 25.6

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Chart 2: Underlying cash balance projected to 2024‑25

Note: The underlying cash balance excludes Future Fund earnings and payments. MYEFO tax cap projection was not published at MYEFO.

Source: Treasury projections.

In the scenario where tax receipts are capped at 23.9 per cent of GDP, the budget is projected to be at balance in 2018‑19, and is in a surplus of 1.4 per cent of GDP in 2024‑25. This is compared to the 2013‑14 MYEFO projections, where the underlying cash balance was projected to remain in deficit across the medium term.

Data - Chart 2: Underlying cash balance projected to 2024‑25
Per cent of GDP 2013‑14 2014‑15 2015‑16 2016‑17 2017‑18 2018‑19 2019‑20 2020‑21 2021‑22 2022‑23 2023‑24 2024‑25
2013‑14 MYEFO ‑ tax cap ‑3.0 ‑2.1 ‑1.4 ‑1.0 ‑1.5 ‑1.5 ‑1.3 ‑1.4 ‑1.5 ‑1.6 ‑1.7  
2014‑15 Budget ‑ tax cap ‑3.1 ‑1.8 ‑1.0 ‑0.6 ‑0.2 0.0 0.6 0.9 1.0 1.1 1.2 1.4
2013‑14 MYEFO ‑ no tax cap ‑3.0 ‑2.1 ‑1.4 ‑1.0 ‑1.5 ‑1.5 ‑1.2 ‑1.0 ‑0.9 ‑0.7 ‑0.5  
2014‑15 Budget ‑ no tax cap ‑3.1 ‑1.8 ‑1.0 ‑0.6 ‑0.2 0.0 0.6 1.1 1.5 1.9 2.3 2.8

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Chart 3: Total payments projected to 2024‑25

In the scenario with a tax cap, the payments-to-GDP ratio declines from 25.3 per cent of GDP in 2024-25 to 24.2 per cent in 2024-25, falling below the long-term average.

Note: Total payments include Future Fund payments. MYEFO tax cap projection was not published at MYEFO.

Source: Treasury projections.

In the scenario with a tax cap, the payments‑to‑GDP ratio declines from 25.3 per cent of GDP in 2024‑25 to 24.2 per cent in 2024‑25, falling below the long‑term average.

Data - Chart 3: Total payments projected to 2024‑25
Per cent of GDP 2013‑14 2014‑15 2015‑16 2016‑17 2017‑18 2018‑19 2019‑20 2020‑21 2021‑22 2022‑23 2023‑24 2024‑25
2013‑14 MYEFO ‑ no tax cap 25.9 25.4 25.2 25.0 25.9 26.2 26.3 26.4 26.4 26.5 26.5  
2014‑15 Budget ‑ no tax cap 25.9 25.3 24.8 24.7 24.8 25.1 24.8 24.7 24.5 24.4 24.2 24.0
2014‑15 Budget ‑ tax cap 25.9 25.3 24.8 24.7 24.8 25.1 24.8 24.7 24.6 24.5 24.4 24.2

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Chart 4: Tax receipts projected to 2024‑25

Note: Tax receipts make up the bulk, but not all, of total receipts. Non‑tax receipts make up around 1.5 per cent of GDP.

Source: Treasury projections.

In the scenario with no tax cap, where the average tax rates are allowed to increase above their long‑term average, tax receipts are projected to increase from 22.1 per cent of GDP in 2014‑15 to 25.1 per cent in 2024‑25.

Data - Chart 4: Tax receipts projected to 2024‑25
Per cent of GDP 2013‑14 2014‑15 2015‑16 2016‑17 2017‑18 2018‑19 2019‑20 2020‑21 2021‑22 2022‑23 2023‑24 2024‑25
2013‑14 MYEFO ‑ no tax cap 21.8 22.0 22.5 22.9 23.3 23.6 24.0 24.2 24.5 24.7 25.0  
2014‑15 Budget ‑ no tax cap 21.6 22.1 22.5 23.0 23.2 23.6 23.8 24.1 24.4 24.6 24.9 25.1
2014‑15 Budget ‑ tax cap 21.6 22.1 22.5 23.0 23.2 23.6 23.8 23.9 23.9 23.9 23.9 23.9

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Chart 5: Change in payments share between 2013‑14 MYEFO and 2014‑15 Budget 

This chart shows the fall in the payments to GDP ratio since the 2013-14 Mid-Year Economic and Fiscal Outlook (MYEFO). The MYEFO payments to GDP ratio for 2013-14 was 25.9 per cent of GDP and is the same for the 2014-15 Budget. From 2014-15 through to 2016-17 the ratio compared to MYEFO decreases by around 0.1, 0.4 and 0.3 per cent respectively. In 2017-18, the ratio decreases significantly by 1.1 per cent  compared to the medtium term projection in MYEFO.

This chart shows the fall in the payments to GDP ratio since the 2013‑14 Mid‑Year Economic and Fiscal Outlook (MYEFO). The MYEFO payments to GDP ratio for 2013‑14 was 25.9 per cent of GDP and is the same for the 2014‑15 Budget. From 2014‑15 through to 2016‑17 the ratio compared to MYEFO decreases by around 0.1, 0.4 and 0.3 per cent respectively. In 2017‑18, the ratio decreases significantly by 1.1 per cent compared to the medium term projection in MYEFO.

Data - Chart 5: Change in payments share between 2013‑14 MYEFO and 2014‑15 Budget
X Values MYEFO Budget Long‑term average
2013‑14 25.9 25.9 24.9
2014‑15 25.4 25.3 24.9
2015‑16 25.2 24.8 24.9
2016‑17 25.0 24.7 24.9
2017‑18 25.9 24.8 24.9

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Chart 6: Face value of Commonwealth Government Securities on issue projected to 2024‑25 — with tax cap

In the scenario with a tax cap, CGS on issue in 2023-24 is expected to be $389 billion in 2023-24, compared to $748 billion at MYEFO. CGS is projected to peak at $458 billion in 2019-20, then fall every year to $362 in 2024-25.

Note: A tax‑to‑GDP cap of 23.9 per cent has been applied on these projections. MYEFO tax cap projection was not published at MYEFO.

Source: Australian Office of Financial Management and Treasury projections.

In the scenario with a tax cap, CGS on issue in 2023‑24 are expected to be $389 billion in 2023‑24, compared to $748 billion at MYEFO.

CGS is projected to peak at $458 billion in 2019‑20, then fall every year to $362 billion in 2024‑25.

Data - Chart 6: Face value of Commonwealth Government Securities on issue projected to 2024‑25 — with tax cap
$ billion 2013‑14 2014‑15 2015‑16 2016‑17 2017‑18 2018‑19 2019‑20 2020‑21 2021‑22 2022‑23 2023‑24 2024‑25
2013‑14 MYEFO 310 360 400 440 480 518 562 602 644 693 748  
2014‑15 Budget 320 360 390 430 450 457 458 446 431 412 389 362

Note: Forward estimates rounded to nearest $10 billion.

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Chart 7: Face value of Commonwealth Government Securities on issue projected to 2024‑25 — no tax cap

In the scenario with no tax cap, CGS on issue in 2023-24 are expected to reach $326 billion, compared to $667 billion at MYEFO. 

Source: Australian Office of Financial Management and Treasury projections.

In the scenario with no tax cap, CGS on issue in 2023‑24 are expected to reach $326 billion, compared to $667 billion at MYEFO.

Data - Chart 7: Face value of Commonwealth Government Securities on issue projected to 2024‑25 — no tax cap
$ billion 2013‑14 2014‑15 2015‑16 2016‑17 2017‑18 2018‑19 2019‑20 2020‑21 2021‑22 2022‑23 2023‑24 2024‑25
2013‑14 MYEFO 310 360 400 440 480 518 560 592 619 645 667  
2014‑15 Budget 320 360 390 430 450 457 458 441 415 376 326 260

Note: Forward estimates rounded to nearest $10 billion.

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Chart 8: Net debt projected to 2024‑25 — with tax cap

 

Note: A tax‑to‑GDP cap of 23.9 per cent has been applied on these projections. MYEFO tax cap projection was not published at MYEFO.

Source: Treasury projections.In a scenario with a tax cap, net debt is projected to fall to 0.7 per cent of GDP in 2024-25

In a scenario with a tax cap, net debt is projected to fall to 2.6 per cent of GDP in 2023‑24, compared to 17.3 per cent at the 2013‑14 MYEFO. In 2024‑25 net debt is projected to be 0.7 per cent of GDP.

Data - Chart 8: Net debt projected to 2024‑25 — with tax cap
Per cent of GDP 2013‑14 2014‑15 2015‑16 2016‑17 2017‑18 2018‑19 2019‑20 2020‑21 2021‑22 2022‑23 2023‑24 2024‑25
2013‑14 MYEFO 12.1 14.2 15.2 15.7 16.1 16.2 16.2 16.1 16.4 16.8 17.3  
2014‑15 Budget 12.5 13.9 14.4 14.6 14.0 13.4 11.1 8.7 6.6 4.5 2.6 0.7

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Chart 9: Net interest payments projected to 2024‑25 — with tax cap

The net interest payments are expected to peak at $13.1 billion in 2018‑19 and decline to $6.6 billion in 2024-25.

Note: Net interest payment is total interest receipts minus total interest payments. A tax‑to‑GDP cap of 23.9 per cent has been applied to these projections.

Source: Treasury projections.

In the tax cap scenario, net interest payments are expected to peak at $13.1 billion in 2018‑19 and decline to $6.6 billion in 2024‑25.

Data - Chart 9: Net interest payments projected to 2024‑25 — with tax cap
$ billion 2013‑14 2014‑15 2015‑16 2016‑17 2017‑18 2018‑19 2019‑20 2020‑21 2021‑22 2022‑23 2023‑24 2024‑25
2013‑14 MYEFO 8.8 10.6 13.5 12.8 15.6 17.8 20.1 22.3 24.5 27.8 31.5  
2014‑15 Budget 10.7 10.5 11.5 12.2 12.9 13.1 12.6 11.5 10.3 9.7 8.3 6.6

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Chart 10: Government decisions have lowered the overall impact of revenue measures

This chart shows the cumulative value of revenue measure decisions by the former government from the 2008-09 Budget to the 2013 PEFO building to over $100 billion. The cumulative value of revenue decisions of this government from MYEFO 2013-14 to the 2014-15 Budget is a reduction in revenue of over $5 billion.

*Cumulative value of revenue measures taken in each budget year

This chart shows the cumulative value of revenue measure decisions by the former government from the 2008-09 Budget to the 2013 PEFO building to over $100 billion. The cumulative value of revenue decisions of this government from MYEFO 2013-14 to the 2014-15 Budget is a reduction in revenue of over $5 billion.

Data - Chart 10: Government decisions have lowered the overall impact of revenue measures
Financial Year Budget Revenue Measures
2008-09 28.99
2009-10 26.05
2010-11 20.69
2011-12 50.45
2012-13 79.14
2013-14 107.33
2013-14 -14.35
2014-15 -5.67

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Chart 11: Structural budget balance estimates

The grey range spans structural budget estimates using the average terms of trade between 1986‑87 and 2010‑11 (lower bound), which is the OECD’s assumption for Australia’s structural level of the terms of trade, and using the forecast average from 2003‑04 to 2015‑16 (upper bound). The central estimate is based on the structural level of the terms of trade in the Government’s medium‑term economic projections. 

Note: The grey range spans structural budget estimates using the average terms of trade between 1986‑87 and 2010‑11 (lower bound), which is the OECD’s assumption for Australia’s structural level of the terms of trade, and using the forecast average from 2003‑04 to 2015‑16 (upper bound). The central estimate is based on the structural level of the terms of trade in the Government’s medium‑term economic projections. The methodology for producing the structural budget balance estimates was detailed in Treasury Working Paper 2013‑01.

Source: ABS cat. no. 5206.0, 5302.0, 6202.0, 6401.0 and Treasury.

The grey range spans structural budget estimates using the average terms of trade between 1986‑87 and 2010‑11 (lower bound), which is the OECD’s assumption for Australia’s structural level of the terms of trade, and using the forecast average from 2003‑04 to 2015‑16 (upper bound). The central estimate is based on the structural level of the terms of trade in the Government’s medium‑term economic projections.

Data - Chart 11: Structural budget balance estimates
Structural budget estimates
Date UCB (%GDP) SBB/actual GDP (%) SBB/actual GDP (%) SBB/actual GDP (%) OECD less Post‑boom average
2000‑01 0.80000 1.00000 1.00000 1.00000 0.00000
2001‑02 ‑0.10000 0.20000 0.20000 0.20000 0.00000
2002‑03 0.90000 1.20000 1.20000 1.20000 0.00000
2003‑04 0.90000 1.00000 1.00000 1.00000 0.00000
2004‑05 1.50000 1.20000 1.20000 0.90000 ‑0.30000
2005‑06 1.60000 1.10000 1.10000 0.30000 ‑0.80000
2006‑07 1.60000 0.40000 0.70000 ‑0.40000 ‑1.20000
2007‑08 1.70000 ‑0.20000 0.40000 ‑0.90000 ‑1.40000
2008‑09 ‑2.10000 ‑3.60000 ‑2.80000 ‑4.40000 ‑1.60000
2009‑10 ‑4.20000 ‑4.80000 ‑4.00000 ‑5.50000 ‑1.50000
2010‑11 ‑3.40000 ‑4.40000 ‑3.70000 ‑5.00000 ‑1.30000
2011‑12 ‑2.90000 ‑4.20000 ‑3.50000 ‑4.80000 ‑1.30000
2012‑13 ‑1.20000 ‑2.00000 ‑1.30000 ‑2.70000 ‑1.40000
2013‑14 ‑3.10000 ‑3.50000 ‑2.70000 ‑4.20000 ‑1.60000
2014‑15 ‑1.80000 ‑1.70000 ‑0.80000 ‑2.50000 ‑1.70000
2015‑16 ‑1.00000 ‑0.80000 0.10000 ‑1.60000 ‑1.80000
2016‑17 ‑0.60000 ‑0.50000 0.50000 ‑1.40000 ‑1.90000
2017‑18 ‑0.20000 ‑0.10000 1.00000 ‑1.00000 ‑2.00000
2018‑19 0.00000 0.20000 1.30000 ‑0.70000 ‑2.00000
2019‑20 0.60000 0.90000 1.90000 ‑0.10000 ‑2.00000
2020‑21 0.90000 0.90000 2.00000 0.00000 ‑2.00000
2021‑22 1.00000 1.00000 2.00000 0.10000 ‑1.90000
2022‑23 1.10000 1.10000 2.10000 0.20000 ‑1.90000
2023‑24 1.20000 1.20000 2.20000 0.40000 ‑1.80000

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Chart B1: Confidence intervals around real GDP growth rate forecasts

Note: The central line shows the outcomes and the 2014‑15 Budget forecasts. Annual growth rates are reported for the outcomes. Average annualised growth rates from 2012‑13 are reported for 2013‑14 onwards. (f) are forecasts. Confidence intervals are based on the root mean square errors (RMSEs) of Budget forecasts from 1998‑99 onwards, with outcomes based on December quarter 2013 National Accounts data.

Source: ABS cat. no. 5206.0, Budget papers and Treasury.

This chart shows confidence intervals around the Budget forecast for average annualised real GDP growth. The forecast for average annualised real GDP growth from 2012‑13 to 214‑15 is around 2   per cent, with the 90 per cent confidence interval around 2   percentage points wide.

Data - Chart B1: Confidence intervals around real GDP growth rate forecasts
X Values Central forecast 90 upper 70 upper 70 lower 90 lower
2007‑08 3.7        
2008‑09 1.7        
2009‑10 2.0        
2010‑11 2.2        
2011‑12 3.6        
2012‑13 2.6        
2012‑13 to 13‑14 (f) 2.7 3.85 3.42 1.98 1.55
2012‑13 to 14‑15 (f) 2.6 3.90 3.42 1.78 1.30
2012‑13 to 15‑16 (f) 2.7 3.64 3.29 2.11 1.76

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Chart B2: Confidence intervals around nominal GDP growth rate forecasts

Note: See note to Chart B1.

Source: ABS cat. no. 5206.0, Budget papers and Treasury.

This chart shows confidence intervals around the Budget forecast for average annualised nominal GDP growth. The forecast for average annualised nominal GDP growth from 2012‑13 to 2014‑15 is around 3   per cent, with the 90 per cent confidence around 4   percentage points wide.

Data - Chart B2: Confidence intervals around nominal GDP growth rate forecasts
X Values Central forecast 90 upper 70 upper 70 lower 90 lower
2007‑08 8.5        
2008‑09 6.9        
2009‑10 3.0        
2010‑11 8.3        
2011‑12 5.6        
2012‑13 2.5        
2012‑13 to 13‑14 (f) 4.0 5.37 4.87 3.13 2.63
2012‑13 to 14‑15 (f) 3.5 5.69 4.88 2.12 1.31
2012‑13 to15‑16 (f) 3.9 6.65 5.63 2.17 1.15

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Chart B3: Confidence intervals around receipt forecasts

Note: The central line shows the outcomes and 2014‑15 Budget point estimate forecasts. Confidence intervals use RMSEs for Budget forecasts from the 1998‑99 Budget onwards.

Source: Budget papers and Treasury.

This chart shows confidence intervals around the 2014‑15 Budget forecast for receipts (excluding GST) as a percentage of GDP. The 2014‑15 Budget forecast for receipts (excluding GST) is approximately 20.3 per cent of GDP in 2014‑15. The 90 per cent confidence interval for 2014‑15 is around 2.9 percentage points wide.

Data - Chart B3: Confidence intervals around receipt forecasts
X Values Central forecast (% GDP) 90% upper 70% upper 70% lower 90% lower
2007‑08 21.4        
2008‑09 20.0        
2009‑10 18.6        
2010‑11 18.2        
2011‑12 19.1        
2012‑13 19.9        
2013‑14 19.8 20.10 19.97 19.54 19.41
2014‑15 20.3 21.79 21.26 19.43 18.90
2015‑16 20.7 23.57 22.50 18.85 17.78

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Chart B4: Confidence intervals around payment forecasts

Note: See note to Chart B3.

Source: Budget papers and Treasury.

This chart shows confidence intervals around the 2014‑15 Budget forecast for payments (excluding GST) as a percentage of GDP. The 2014‑15 Budget forecast for payments (excluding GST) is approximately 22.0 per cent of GDP in 2014‑15. The 90 per cent confidence interval for 2014‑15 is around 1.3 percentage points wide.

Data - Chart B4: Confidence intervals around payment forecasts
X Values Central forecast (% GDP) 90% upper 70% upper 70% lower 90% lower
2007‑08 19.5        
2008‑09 21.8        
2009‑10 22.6        
2010‑11 21.3        
2011‑12 21.9        
2012‑13 21.0        
2013‑14 22.7 23.21 23.03 22.43 22.26
2014‑15 22.0 22.64 22.40 21.57 21.33
2015‑16 21.5 22.46 22.10 20.87 20.50

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Chart B5: Confidence intervals around the underlying cash balance forecasts

Note: See note to Chart B3.

Source: Budget papers and Treasury.

This chart shows confidence intervals around the 2014‑15 Budget forecast for the underlying cash balance (excluding expected net Future Fund earnings) as a percentage of GDP. The 2014‑15 Budget forecast for the underlying cash balance excluding expected net Future Fund earnings) is approximately – 1.8 per cent of GDP in 2014‑15. The 90 per cent confidence interval for 2014‑15 is around 3.4 percentage points wide.

Data - Chart B5: Confidence intervals around the underlying cash balance forecasts
X Values Central forecast (% GDP) 90% upper 70% upper 70% lower 90% lower
2007‑08 1.7        
2008‑09 ‑2.2        
2009‑10 ‑4.2        
2010‑11 ‑3.4        
2011‑12 ‑2.9        
2012‑13 ‑1.2        
2013‑14 ‑3.1 ‑2.58 ‑2.79 ‑3.51 ‑3.72
2014‑15 ‑1.8 ‑0.10 ‑0.74 ‑2.91 ‑3.55
2015‑16 ‑1.0 2.25 1.05 ‑3.05 ‑4.25

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The structural budget balance estimates shown in Chart 11 incorporate the changes to the medium‑term economic projections framework detailed in Budget Statement 2 and Treasury Working Papers 2014‑01 and 2014‑02. Because structural budget balance calculations are sensitive to estimates of the output gap, these methodological changes have resulted in revisions to the structural budget balance estimates. The peak impact is in 2015‑16, when the structural budget deficit is projected to be 0.8 percentage points smaller than would have been the case had the previous medium‑term projections framework been retained. The impact becomes smaller as the estimated output gap closes, falling to 0.5 percentage points in 2018‑19 and close to zero by 2022‑23. These impacts are within the range of structural balance estimates shown in the 2013‑14 MYEFO and do not affect the result that the budget was projected to remain in structural deficit throughout the medium‑term projections period at the 2013‑14 MYEFO and is now projected to reach structural balance in around 2018‑19.