Fiscal policy

  • A strong fiscal position enables investment, funds the services the community expects, and also provides strength to defend against economic shocks.
  • While the budget is now likely to return to surplus, federal net debt is at its highest in over 50 years.
  • Delivering a strong fiscal position requires a strong economy, as economic growth drives revenue growth.
  • Spending per capita increased by 35 per cent in the decade leading up to the GFC. That structural increase in spending then combined with the revenue impact of the GFC and lower commodity prices to produce a string of budget deficits.
  • Disciplined fiscal policy helps underpin an attractive environment for businesses and allows firms to make investment decisions with greater confidence.
  • Australians are still not getting the most value for the money government spends on its behalf.
  • The Intergenerational Report projects a widening fiscal gap approaching 6 per cent of GDP by 2054-55.