The Australian Government has released the Final Budget Outcome for the 2018-19 Financial Year, which shows an underlying cash deficit of just $690 million for the year. This represents a deficit of 0.0 per cent of gross domestic product (GDP).

In a press statement, Treasurer John Frydenberg declared ‘the Budget has returned to balance for the first time in 11 years’.

The underlying cash balance is $13.8 billion better than estimated at the time of the 2018-19 Budget.

Mr Frydenberg said 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 eight 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,” said Mr Frydenberg.

“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 also shows that spending is kept 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.

Real GDP grew by 1.9 per cent in 2018-19, softer than the 3 per cent growth forecast in the 2018-19 Budget. 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.

The Final Budget Outcome 2018-19 is available from the 2018-19 Budget website.

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