Australia’s first surplus in 15 years has been revised up to $22.1bn, in a major boon for the Albanese government’s first full-year budget.
The final budget outcome for 2022-23, to be released by the federal treasurer, Jim Chalmers, on Friday, shows a surplus of 0.9% of GDP.
The result was driven by surging personal and company tax receipts, due to low unemployment, higher wages and higher commodity prices.
The government says the final outcome will confirm it has returned 95% of the upward revision in tax to the budget bottom line, compared with an average of 40% returned by the former Coalition government’s budgets.
Gross debt will be $87.2bn lower by the end of the financial year compared with the estimate before the May 2022 budget, avoiding about $12bn in interest payments over the five years to 2026-27.
Despite the one-off surplus, Australia’s budget is still under pressure from rising spending on health, aged care, the NDIS, defence and interest payments.
The May budget projected a deficit of $13.9bn in 2023-24. Revision of the 2022-23 surplus up from $4bn to $22.1bn may raise hopes of a second year’s surplus, particularly because unemployment has so far remained at 3.7%.
But the treasury expects two years of very slow economic growth, with 12 interest rate rises weighing on household consumption. The Australian economy has entered a per-capita recession, meaning it is only growing due to population growth.
The surplus may spark renewed calls for more social spending to ease cost-of-living pressures and to fulfil unfunded aspirations including paying superannuation on paid parental leave.
Chalmers said “a stronger budget is not an end in itself – it’s the foundation on which we build everything that we want to do for our people and our society”.
“The Albanese government has delivered this surplus at the same time as providing billions of dollars in cost-of-living relief and making vital investments in the long-term growth of our economy,” he said in a statement.
“Our responsible budget management has not just delivered the first surplus in 15 years, it’s also taken pressure off inflation, interest rates and the cost of living.
“Despite the surplus for 2022-23, structural pressures are intensifying rather than easing on the budget and these will take more than one year or one parliamentary term to address.”
On Monday the Albanese government will release the employment white paper, which will aim to boost growth by achieving full employment, increasing productivity and removing barriers to workforce participation.