Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
The Hon. Josh Frydenberg MP
Date: Thursday, 19 September 2019
As a result of the Morrison Government’s economic plan and responsible budget management the Budget has returned to balance for the first time in 11 years.
The underlying cash balance in the Final Budget Outcome for the 2018-19 financial year is $13.8 billion better than estimated at the time of the 2018-19 Budget.
The deficit of $690 million represents 0.0 per cent of gross domestic product (GDP).
A growing economy with more jobs and stronger terms of trade than anticipated at the time of the 2018-19 Budget have driven total receipts $11.5 billion higher, with payments $6.6 billion lower than expected at the time of the 2018-19 Budget.
Employment growth far exceeded expectations at the time of delivering the 2018-19 Budget in May 2018.
With about 300,000 additional jobs created in 2018-19, employment grew by 2.6 per cent, well above the 1½ per cent growth forecast in the 2018-19 Budget.
More than nine out of ten jobs created in the last year were in full time employment with the proportion of those of working age in welfare now at its lowest level in 30 years.
More jobs drive increases in revenue as well as lower payments, with individual tax receipts up by $5.7 billion compared to the 2018-19 Budget forecast.
Our strong fiscal management has put the Budget on a sustainable trajectory, ensuring that we can guarantee the essential services that Australian’s rely on.
The 2018-19 Final Budget Outcome shows that we have kept spending as a share of GDP in 2018-19 at 24.6 per cent of GDP, below the long-run average of 24.7 per cent for the second consecutive year, while also providing record levels of investment in essential services like hospitals, schools and aged care.
In 2018-19, our total funding for Health reached a record $80.2 billion, $4.2 billion more than we provided in 2017-18 and around $19.0 billion more than was provided in 2012-13, before we came into Government. There is also record investment of around $20 billion in Australian schools, $1.7 billion more than we provided in 2017-18 and around $7.0 billion more than 2012-13. There is record investment in aged care $19.8 billion, $2.0 billion more than we provided in 2017-18 and increasing from $12.8 billion that was provided in 2012-13. Spending on the NDIS more than doubled in 2018-19 compared to the previous year, going from $4 billion in 2017-18 to $8.5 billion in 2018-19.
These outcomes demonstrate that the Government’s economic plan is working and confirm that the Budget will be back in the black and back on track for the 2019-20 year.
Importantly Australia has completed its 28th consecutive year of economic growth and maintained its AAA credit rating. With more than 1.4 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 which is benefiting from the free trade agreements (FTAs) negotiated by the Coalition over the last six years. Our FTAs combined with strong prices for our key commodities exports has seen the current account move into surplus for the first time since 1975.
Nominal GDP grew by 5.3 per cent in 2018-19, which was significantly stronger than the 2018-19 Budget forecast of 3 ¾ per cent. This was the result of stronger than-expected employment growth and higher-than-assumed prices for key commodities.
The Final Budget Outcome for 2018-19 further demonstrates that the Government’s economic plan is working to create more jobs, and to ensure Australia can continue to afford the essential services Australians rely on.
In the year ahead the economy will continue to be supported by the Government’s economic plan as outlined in the 2019-20 Budget, including the largest tax cuts in two decades, and our $100 billion pipeline of infrastructure investment.
The Final Budget Outcome 2018-19 can be found at www.budget.gov.au.
Cormann: Karen Wu - 0428 350 139
Frydenberg: Kane Silom - 0438 225 175