Senator the Hon Mathias Cormann
Minister for Finance
JOURNALIST: Thanks very much Senator. Exactly where is spending as a percentage of GDP as we speak?
MATHIAS CORMANN: The formal update will happen by the end of the year in the Mid-Year Economic and Fiscal Outlook. In the budget for this financial year, the estimate was that spending as a share of GDP would be at about 25.9 per cent and that it would reduce to about 25.3 per cent at the end of the forward estimates period. But as the Treasurer has rightly indicated, at around about 26 per cent as a share of GDP, spending in Australia is too high. We’ve got to continue to work to bring it down.
JOURNALIST: He said over 26 per cent in his first media conference as Treasurer, how far over?
MATHIAS CORMANN: The update in terms of where exactly we are at will be made in the half yearly budget update later this year.
JOURNALIST: Could spending as a share of GDP go up before it does come down?
MATHIAS CORMANN: You have to remember that there are two parts to this. One is the strength of the economy, the second one is the level of expenditure in dollar terms. The stronger economic growth, it also helps with bringing down expenditure as a share of GDP. All really depends on the growth figures as well as the level of expenditure in dollar terms. All will be revealed in our half yearly budget update later this year.
JOURNALIST: So even though it’s the Government’s strong intention to bring expenditure as a percentage down, not ruling out going up before coming down?
MATHIAS CORMANN: I’m not going to start predicting things based on information that we haven’t got yet. The reason we are releasing the Mid-Year Economic and Fiscal Outlook in December is because we are waiting for the third quarter National Accounts data, which will give us an indication on how the economy has been performing in our third quarter. That information will be fed into the economic parameters underpinning our half yearly budget update. Nobody can actually accurately predict right now where it will exactly end up. The reason we don’t provide a running commentary, the reason we don’t provide updates on a daily basis, that we wait for the Mid-Year Economic and Fiscal Outlook in the ordinary course of events is because of exactly that reason. Because we do need to ensure that we have all the necessary information to base these sorts of judgements on.
JOURNALIST: Thanks so much.