THE HON JOSH FRYDENBERG MP
SENATOR THE HON MATHIAS CORMANN
Minister for Finance & the Public Service
JOINT MEDIA RELEASE
25 September 2018
SMALLEST DEFICIT IN TEN YEARS
The Liberal-National Government’s economic plan and responsible budget management has seen the Final Budget Outcome for the 2017-18 financial year record an underlying cash deficit $19.3 billion better than estimated at the time of the 2017-18 Budget.
At $10.1 billion, just 0.6 per cent of gross domestic product (GDP), the underlying cash deficit is the smallest in ten years – clear evidence that the Liberal-National Government’s plan for a stronger economy, more jobs and to repair the Budget is working.
Stronger economic growth and much stronger employment growth than anticipated at the time of the 2017-18 Budget have driven increases in personal income tax and company tax receipts, with total receipts $13.4 billion higher than expected at the time of the Budget.
Total payments were $6.9 billion lower than forecast at Budget time, including as a result of lower welfare payments with more Australians in paid work. Welfare dependency for working age Australians is now at its lowest level in 25 years and in 2017-18, there were 90,000 fewer working age Australians on welfare.
Net Future Fund earnings were $1.1 billion higher than expected at the time of the 2017-18 Budget (which are excluded from the underlying cash balance).
These outcomes demonstrate that the Liberal-National Government’s economic plan is working and confirm that the Budget is firmly on the path back to balance.
The Australian economy has completed its 27th consecutive year of growth. With more than one million jobs having been created since the Coalition Government was first elected in 2013, today’s outcome reflects the record number of people in jobs and an economy in which businesses are growing.
Real GDP in 2017-18 was stronger than anticipated in the 2017-18 Budget. Nominal GDP grew by 4.7 per cent in 2017 18, which was significantly stronger than the 2017-18 Budget forecast of 4 per cent. This was the result of stronger than-expected real GDP growth and higher-than-assumed prices for key commodities.
Almost 350,000 jobs were created in 2017-18, with employment growing by 2.7 per cent through the year to the June quarter 2018, well above the 1½ per cent growth forecast in the 2017-18 Budget.
Today’s positive Final Budget Outcome builds on the release of the National Accounts earlier this month, which showed that the economy grew 3.4 per cent through the year – the fastest rate of growth since the September quarter 2012 during the height of the mining investment boom and faster than any G7 economy. It also follows last week’s reaffirmation of our AAA credit rating by Standard & Poor’s – Australia being one of only 10 countries with such a rating from all three major ratings agencies.
The Final Budget Outcome for 2017-18 further demonstrates that the Coalition Government’s economic plan is working to create more jobs and ensure that we can afford to deliver the essential services that Australians rely on.
The Final Budget Outcome 2017-18 can be found at www.budget.gov.au.