The 2011-12 Final Budget Outcome shows that Australias public finances remain amongst the strongest in the developed world, providing further evidence of Australias strong economic fundamentals.
The underlying cash balance for 2011-12 showed a small improvement of $661million from the 201213Budget estimate. This is the smallest variation between the budget estimate and outcome for a decade.
The small improvement in the underlying cash balance was the result of slightly lower cash payments of $305million, as well as slightly higher cash receipts of $356million.
The Australian Government general government sector recorded an underlying cash deficit of 3.0per cent of GDP ($43.7 billion) for 2011-12, less than half the average budget deficit recorded for the major advanced economies in 2011. It also compares to deficits of around 10 per cent of GDP in the United States and around 9 per cent of GDP in the United Kingdom.
Total taxation receipts for 201112 were around $290million higher than forecast in the 201213 Budget, consistent with solid wages and employment growth. However this figure masks a hefty fall of $876 million in company tax receipts due largely to lower corporate profits.
Clearly the impact of the global financial crisis is still being felt in taxation collections. While tax receipts are recovering from their postfinancial crisis lows, the 2011-12 outcome is $26 billion below the estimate before the global financial crisis. Tax receipts remain low as a proportion of GDP by historical standards, with accumulated losses suffered during the global downturn continuing to flow through the tax system.
Total cash payments for 2011-12 were $305million lower than estimated in the 2012-13 Budget. The reduction in payments primarily reflected lowerthanexpected payments across a range of demanddriven and grantbased programs.
Australian Government net debt was $147.3billion (10.0per cent of GDP) in 2011-12- dramatically lower than the net debt positions for the major advanced economies, which averaged around 83.5per cent of GDP in 2011.
Australias stronger fiscal position was again recognised last week by the IMF and the credit rating agency Standard and Poors, which reaffirmed Australias AAA rating.
Australia's public finances remain among the strongest in the world in large part due to the decisive actions taken to avoid recession and the strict fiscal discipline delivered by the Government.
While the decline in commodity prices in recent months will inevitably make it more difficult to return the budget to surplus in 2012-13, the Government remains committed to doing so.
Returning the budget to surplus is Australias best defence at a time of ongoing global turbulence, and the Government has a proven track record of finding responsible and measured savings which reflect core Labor values of supporting low and middle income households and our communitys most vulnerable.
As a result Australia is expected to return to surplus ahead of every major advanced economy and our level of net debt is expected to peak around a tenth of the level across major advanced economies, as a percentage of GDP.
An electronic version of the Final Budget Outcome 2011-12 can be found at http://www.budget.gov.au/