In an extraordinary turnaround, updated financial statements show the government is swimming in cash.
Key points:
- The underlying cash balance for the year to May (2022-2023) has come in at $19 billion
- Today’s figures have net debt dramatically lower than earlier estimates at $516.7 billion
- Economist Chris Richardson says the figures are a “reminder of how lucky the Lucky Country has been”
Federal government finances, or the budget, is updated throughout the year.
The revised budget estimate for the 2022-2023 financial year was an underlying cash surplus of $4.2 billion.
Earlier this week Treasurer Jim Chalmers said the final budget outcome was likely to be “substantially” higher than that.
New figures today show just how substantial the improvement is.
The underlying cash balance for the year to May (2022-2023) has come in at $19 billion.
Total receipts were $8.5 billion higher than the 2022-23 Revised Budget profile.
Total payments were $3.0 billion lower than the 2022-23 Revised Budget profile.
And up until now, net debt has been estimated at roughly $1 trillion.
Today’s figures have it dramatically lower at $516.7 billion.
What’s behind the improvement in the federal government’s coffers?
Strong commodities prices and a record number of Australians in employment have boost personal and company tax receipts by $28.2 billion.
Economist Chris Richardson tweeted: “It shows absolutely barnburning revenues.”
“But the dollars are also an embarrassment at a time the economy is slowing sharply and family finances are under siege,” he wrote.
“The figures are a reminder of how lucky the Lucky Country has been – conditions have thrown money at the taxman. Partly that’s as war drove up commodity prices, & partly it’s as inflation took money from the punters & placed it into the pockets of the govt (& of business).”
But economists agree the federal budget remains in structural deficit.
That is because the interest payments on debt, as well as spending on defence and the NDIS, are set to cost hundreds of billions of dollars over the forward estimates.
In other words, this whopping surplus is likely to disappear as quickly as it arrived.