Deficit drop drives new spend
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The Albanese Government has revealed a smaller deficit for 2024-25.
The deficit is now $26.9 billion, $1.3 billion lower than earlier forecasts and nearly half the $47.1 billion deficit inherited from the Coalition.
Labor, having delivered two budget surpluses, says it has made progress in debt reduction and expenditure control.
Gross debt is set to peak at 36.7 per cent of GDP, well below initial projections, saving an estimated $70 billion in interest costs over a decade.
Average real spending growth has been constrained to 1.5 per cent annually over six years - less than half the 30-year average.
New expenditures include $8.8 billion for pensions, Medicare, disaster recovery, and veterans’ support, with total new spending since the election at $47.6 billion.
Treasurer Jim Chalmers has described the outlook as “a responsible set of books”, adding that although deficits in future years have worsened due to inflationary pressures, essential investments remain a priority.
Economic growth for this year is revised down to 1.75 per cent from 2 per cent.
Employment growth remains strong, with job creation exceeding expectations, while real wages are forecast to rise as inflation moderates.
Increased migration, with 80,000 more arrivals expected this year, bolsters workforce expansion.
