The Federal Government has announced the first back-to-back surplus in almost 20 years, as it delivered the Final Budget Outcome for 2023–24. The surplus was $15.8 billion.
A budget surplus means that over the last financial year, the Government made more money than it spent.
Here’s what you need to know.
Surplus v deficit
A budget surplus is when the government makes more money than it spends in a year. A budget deficit is when it spends more money than it makes.
The Government has three main streams of revenue: income taxes, the taxes companies pay, and goods and services taxes. That money goes towards a number of different things including welfare, health care, and education.
Debt
The Government is still in almost $1 trillion of debt.
It pays billions of dollars in interest on this debt every year. Surpluses don’t automatically eradicate debt.
On this, Treasurer Jim Chalmers said: “The stronger budget position means gross debt is $149.1 billion lower in 2023–24 than what was forecast at the election, which means we avoid around $80 billion in interest costs over the decade”.
Govt statement
The Federal Government attributed the $15.8 billion budget surplus to a “combination of banking revenue upgrades and spending restraint”.
In a press conference on Monday, the Treasurer suggested the government’s economic plan is “all about” easing the cost of living crisis while also fighting inflation.
“We’ve delivered two surpluses at the same time as we’ve rolled out responsible cost‑of‑living relief including tax cuts for every taxpayer,” Chalmers said.
Inflation
Last week, the Australian Bureau of Statistics announced that Australia’s annual inflation rate was 2.7% – the lowest rate since August 2021.
This does not mean prices are falling, but rather increasing at a slower rate than before.
Chalmers claimed today that the Government’s “back‑to‑back surpluses are helping in the fight against inflation”.
Opposition
The Opposition said in a statement that “today’s Final Budget Outcome reveals Labor’s is taxing more, and spending more, than any government in history”.
It added that “with the strong economic conditions Labor inherited, a drover’s dog could have delivered a surplus over the last two financial years”.
Shadow Treasurer Angus Taylor called this a “disastrous situation” for the Government.