The View | The 2023-24 Federal Budget

The massive turnaround in the FY23 Budget’s outcome (against previous forecasts) needs to be understood. Further, a possible surplus in FY24 (see below) challenges the Government’s claim that budget repair is necessary. There is no “looming budget crisis” and the FY23 outcome places a large question mark over the Treasury’s forecasting capabilities. Indeed, the Treasurer’s claim of a “reinvestment of excessive budget revenues back into the budget” only occurred because Treasury failed to advise the government that a surplus was coming!

Readers will recall that based on Treasury analysis, former Treasurer Josh Frydenberg forecasted a FY23 deficit of $76 billion in March 2022. This was subsequently reduced in October2022 by new Treasurer Jim Chalmers, to a forecast $38 billion deficit. In his recent Budget address, the Treasurer announced a forecast surplus of $4 billion and this may even understate the outcome for FY23 with months of surpluses still to be banked.

So, did a change in government and their superior economic management cause this dramatic improvement? Or was Treasury hopelessly deficient in their original forecasts? The budget outcome will be at least $80 billion better than the original forecast, representing a staggering4% of GDP, and that is simply too large to justify and ignore.

Read the full article here: The 2023-24 Federal Budget – Commentary by John Abernethy