Today Shadow Treasurer Chris Bowen and Shadow Minister of Finance Jim Chalmers has released the Australian Labor Party’s budget plan. It forecasts greater budget surpluses over the forward estimates than the current Coalition Government and promises that tax receipts will not rise above 24.3 per cent of the GDP over the medium term.

Key points of the Labor’s budget plan include:

  • Delivers a budget surplus in 2019-20, the same year as the Coalition.
  • Delivers budget surpluses over the forward estimates more than 40 per cent larger than the Coalition, and bigger surpluses over the medium-term (see Figure 1).
  • Delivers strong surpluses of one per cent of GDP by 2022-23, four years earlier than the Coalition trajectory.
  • Uses the $87 billion in bigger surpluses over the medium term to pay down more debt.

Figure 1: Labor’s Budget Plan

The budget plan incorporates a technical working assumption that tax receipts do not rise above 24.3 per cent of GDP over the medium term. The ALP said once the budget is in strong surplus position, they will consider offering further tax relief and it will be done via the normal budget process.

The incumbent Coalition Government released its budget proposals on 2 April 2019 before dissolving the Parliament on 11 April 2019. The Coalition promised to keep the federal tax receipts at 23.9 per cent of the GDP.

 

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On the blog: Budget Forum 2019

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