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The federal budget is $18 billion better off thanks to a stronger-than-expected jobs market.
The final budget outcome, to be released on Monday, is set to show a deficit of just under $10 billion for 2024/25 — down from the $28 billion forecasted last financial year.
Treasurer Jim Chalmers said a robust jobs market and a rise in take-home pay for workers were among the reasons for the uptick in budget performance.
He said the final results for the last financial year showed the federal budget was in a strong position.
“In financial terms, our government has achieved more on the budget in the last three years than any prior administration,” he stated.
“We’ve turned two big Liberal deficits into two substantial Labor surpluses in our first two years, significantly reduced the deficit in our third year and continued to pay down debt,” Chalmers said.
The overall budget deficit for the last full financial year is set to be 0.4 per cent of Australia’s gross domestic product.
Chalmers said other factors, such as budget revenue upgrades being banked and spending restraint by the Commonwealth, also contributed to lower deficit levels.
“Today’s figures show that the deficit in our third year is around a fifth of the forecast we inherited from the coalition and around a third of the forecast before the election earlier this year,” he said.
“Prudent economic stewardship is a defining feature of the Albanese Labor government, and today’s outcome confirms that.”
An estimated 70 per cent of revenue upgrades have been banked in the past three years.
The final budget outcome is also expected to show average real spending at 1.7 per cent across the seven years to 2028/29.
The release of the budget paper coincides with the Reserve Bank starting two days of deliberations on whether to cut interest rates again.
The central bank is widely expected to keep the official cash rate on hold at 3.6 per cent following a slight rise in monthly inflation.
Monthly inflation in August rose from 2.8 per cent to 3 per cent, and while the Reserve Bank places more weight on quarterly figures, the increase has dampened expectations of further mortgage relief.
