The 2022-23 Australian Federal Budget contains almost $A40 billion of new spending or revenue reductions across five years from 2021-22.
The Government is allowing fiscal buffers to start rebuilding - forecasting the underlying deficit to reduce by around $A130 billion over the next five years, compared to what the Government had forecast just a few months ago at the Mid-Year Economic and Fiscal Outlook (MYEFO).
Despite reporting a reduced deficit off the back of much larger expected tax revenues, spending is still quite high in this Budget.
The other thing to note, is the Government is reporting much lower deficits than previously forecast but is still not expecting to see a surplus at any point over the next decade.
There's still work to be done to rebuild fiscal buffers so when Australia finds itself in a crisis again, the Government is able to spend aggressively as it did through the pandemic, which really helped ensure the Australian economy was able to see a strong rebound from lockdowns.
Hayden Dimes is Rates Strategist and Economist at ANZ
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