Mid-Year Economic and Fiscal Outlook: Budget 2024-25

Summarised by Shara Cox via Ministers.Treasury

The Australian Government's Mid-Year Economic and Fiscal Outlook highlights significant progress in managing Australia's finances, with the deficit reduced by $1.3 billion, now totalling $26.9 billion—half of the inherited deficit. This marks a notable turnaround, following two surpluses in the first two years of office. Despite global economic challenges, the government has successfully improved the budget position, reducing debt and interest costs. Over the next four years, the budget outlook is $27.1 billion better than earlier projections.

Key achievements include limiting spending growth, identifying savings, and returning a significant portion of revenue upgrades. Gross debt is expected to peak lower than previously forecast, resulting in $70 billion in avoided interest costs. The government has also committed to addressing unavoidable spending increases, such as pension indexing and health service demands, while ensuring veterans receive their entitlements.

The government's economic strategy is centred on tackling inflation, supporting economic growth, and providing cost-of-living relief. This includes tax cuts, energy support for households and small businesses, and investments in areas like early childhood education, housing, healthcare, and clean energy. The approach has contributed to stronger job creation, real wage growth, and reduced gender pay gaps.

Despite some economic slowdown due to higher interest rates and global uncertainty, the government is focused on achieving a "soft landing" for the economy. The outlook is positive, with growth in real incomes, reduced unemployment, and continued fiscal prudence. However, the government acknowledges the need for ongoing budget repair and responsible management to overcome the legacy of previous mismanagement and ensure sustainable future growth.