CBA: Federal Budget tracking $13.6b ahead of forecast

By Stephen Halmarick, Chief Economist at CBA:

Key Points:

Australia’s underlying budget deficit up to January 2023 was $A28.4bn, a $A13.6bn better outcome than expected as at the October 2022 Budget. The headline deficit was $A34.5bn, $A14.9bn lower than expectations.
For the year to January, total revenue to the government was $A335.6bn, which is $A8.5bn more than projected, while outlays are running at $A364.0bn or $A5.1bn lower than expected.
Fiscal policy will have an important part to play in supporting monetary policy to bring Australia’s high inflation rate back to the 2%-3% target. The May 2023 Budget will be critical in this regard.

Economic momentum helping the Budget

The resilience of the Australian economy through H2 2022 continues to help the Commonwealth budget deficit improve relative to expectations in the October 2022 Budget.

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About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.