The Liberal Party of Australia has released an updated budget plan, based on its initial budget proposals on 2 April 2019. The update forecasts a slight overall increase in the cumulative surplus, expecting it to be $45.1 billion over the next four years (Figure 1).

Key points of the Liberals’ budget plan include:

  • Delivers a budget surplus next year, at $7.1 billion (around 0.4 per cent of GDP). It forecasts budget surpluses exceeding one per cent of GDP from 2026-27 onwards.
  • Keeps taxes as a share of GDP capped at 23.9 per cent.
  • Reduces debt as a share of GDP, forecasting zero net debt for 2029-30.
  • Increases the cumulative surpluses outlined in the 2019 PEFO by $102 million over the forward estimates period, building spending commitments to $3.8 billion over the medium term.
  • Offsets spending commitments by new savings of $1.5 billion over the forward estimates, building to $5 billion over the medium term.

Figure 1. Liberals Budget Plan

Projected savings come from an equivalent $1.5 billion reduction of departmental funding to Government agencies. The budget plan proposes maintaining this efficiency dividend at its current level of 2 per cent for a further two years, before stepping it down to 1.5 per cent in 2021-22 and returning to the base rate of 1 per cent from 2022-23.


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