Aussies’ armchair guide to federal budget gobbledygook



* FEDERAL BUDGET: A plan for collecting, spending and borrowing, with income from taxes and investments mostly spent on social security and welfare, health, education, defence and paying interest on debts


* BUDGET PAPERS: Hundreds of pages of economic forecasts, financial strategy, spending and revenue tables and explanations – still printed as the “budget books” but are also issued on a handy USB and online at 7.30pm AEST


* THE NARRATIVE: Once a keenly awaited broadcast as Aussies waited for the latest tax hike on booze and cigarettes, 21st-century themes reflect a government’s priorities amid a housing crisis, cost-of-living pressures, climate change and tensions overseas


* BALANCING THE BUDGET: The government can change tax rates, impose new taxes, abolish old ones, cut spending, introduce new programs and ditch existing ones. When outgoings exceed income, the government must borrow to cover the shortfall


* UNDERLYING CASH BALANCE: Regarded as the best guide to the nation’s financial health. If the budget is said to be in surplus or deficit, this refers to the difference between the tax receipts and payments in the underlying cash balance


* BACK IN BLACK: A lot of political heat is focused on getting “back in black” or “living within our means”, but sometimes a deficit is needed to cover extra needs such as during a pandemic, when a surplus would cause widespread hardship


* AUTOMATIC STABILISERS: A first response to economic shocks. When jobs disappear, a government may spend on new tax breaks or extra welfare payments, which are known as “automatic stabilisers” and force the budget into a temporary deficit


* CYCLICAL DEFICIT: A temporary deficit sparked by extra expenditure is known as a cyclical deficit, with the budget expected to return to balance or surplus when the economy improves


* STRUCTURAL DEFICIT: Occurs when government spending exceeds its income, which most try to avoid because of the political and economic fallout


* FORWARD ESTIMATES: Measures are costed over a four-year period that includes the remainder of the almost-finished fiscal year (to June 30, 2024) and the following three fiscal years


* GOVERNMENT DEBT: A government may raise money through issuing securities or bonds – a type of IOU that pays interest



* The largest deficit in more than four decades was in 2020/21 at $134.2 billion, or 6.5 per cent of GDP, under treasurer Josh Frydenberg due to the COVID pandemic

* The largest surplus was in 2022/23 at $22.1 billion or 0.9 per cent of GDP under Treasurer Jim Chalmers. It was the first surplus since 2007/08 when there was a surplus of $19.8 billion or 1.7 per cent under treasurer Peter Costello

* A federal budget is usually released on the second Tuesday in May, coinciding with the autumnal display of the “budget tree” in a parliamentary courtyard

* But Dr Chalmers held his first budget in October 2022 after Labor won an election in May of that year, and is widely expected to present an election-year budget in early 2025.


Marion Rae
(Australian Associated Press)


Like This