Beyond the budget 2023-24: Fiscal outlook and sustainability

Beyond the budget 2023-24: Fiscal outlook and sustainability presents the Parliamentary Budget Office’s (PBO’s) independent projections for the Commonwealth’s fiscal position across the medium term (2027-28 to 2033-34). It also updates our analysis of long-term fiscal sustainability out to 2066-67.

The 2023-24 Budget showed a significant improvement in the economic and fiscal outlook for 2022-23 and 2023-24, compared to both the 2022-23 October Budget and our previous projections. Expected stronger nominal GDP growth has led to higher revenue and improved budget balances, and lower debt and interest costs across the medium term.

This better outlook has flowed through to improved longer term fiscal projections. In all but one of our scenarios, debt-to-GDP declines in the long term. Notwithstanding this improvement, there are structural challenges in the underlying budget position that will require government decisions to mitigate risks to fiscal sustainability.

The economic outlook, both domestically and internationally, is inherently uncertain. These risks require paying attention to both short term and longer-term challenges. One of these is to ensure that the mechanisms for collecting revenue and managing expenditure are efficient and flexible over time. Slowing productivity growth, the continued reliance on personal income taxes as the main source of revenue, and structural expenditure risks, such as ageing and climate change, remain key sources of fiscal pressure

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