With all state and territory 2023-24 Budgets now released, the Parliamentary Budget Office (PBO) has consolidated the forecasts from these budgets with the Australian Government’s budget – released in May 2023 – to provide an aggregated outlook for the national fiscal position.

The national fiscal outlook has improved since our last report in October 2022, reflecting a stronger COVID-19 recovery than expected in most jurisdictions. Higher than expected commodity prices in 2022-23 improved budget balances, particularly for the Commonwealth, Western Australia (WA) and Queensland (Qld). The introduction of new revenue measures in other jurisdictions such as Victoria’s COVID debt levy and the increase in coal royalty rates in New South Wales (NSW) are also expected to increase revenue. The total state net operating balance is expected to be in surplus from 2024-25.

Stronger budget balances have reduced national net debt compared to last year, but national public debt interest payments have increased, reflecting changes in interest rates. Per capita net debt continues to increase with national net capital investment per capita approaching a peak.

For the first time, the PBO has expanded its’ fiscal sustainability analysis to apply to the national level. Using a dynamic framework, it shows that in most scenarios, the debt-to-GDP ratio is expected to trend downwards in the longer term. This suggests the national fiscal position is likely to remain sustainable, given prudent fiscal management, providing sufficient fiscal space to address key risks.

Download the report


Comments are closed.