Statement 1: Budget Overview
Introduction
The 2009‑10 Budget has been framed against the backdrop of the deepest global recession since the Great Depression. Early and decisive policy action by the Australian Government and the Reserve Bank of Australia is helping to support the Australian economy. However, the magnitude and ferocity of the global recession means that policy can mitigate only the worst effects of global conditions. A recession in Australia has become inevitable, with unavoidable consequences for Australian jobs.
As a result of the global recession, estimated taxation receipts have been revised down since the 2008‑09 Budget by around $210 billion over the period 2008‑09 to 2012‑13. The global recession and associated sharp falls in commodity prices are the primary sources of the substantial downward revisions, reversing most of the large revenue gains from strong global growth and rising commodity prices between the 2005‑06 Budget and the 2008‑09 Budget.
In the face of the global recession, the Government has allowed the budget to fall into a temporary deficit and engaged in temporary additional borrowing to cushion the impact on jobs and preserve Government spending in vital areas such as health and education.
Notwithstanding the global recession, Australia remains well placed when compared with most other economies around the world.
To support the economy through the global recession, the Government's fiscal stimulus program started with income support and then moved into 'shovel‑ready' infrastructure. This Budget marks the start of the next phase — a move into larger and longer term nation building projects.
The centrepiece of the Budget is a comprehensive program of infrastructure investment — roads, rail, ports, energy, education and research, and health infrastructure. The Government is supporting jobs today by investing in the infrastructure Australia needs for tomorrow.
The infrastructure projects announced in this Budget lay the foundations for a stronger future economy, supporting employment now and positioning Australia to take full advantage of the global recovery when it comes. Further investment in higher education, innovation and participation will complement the infrastructure program and improve long‑term productivity.
The Government has a clear strategy for returning the budget to surplus and as part of this, has fully offset new spending in the final year of the forward estimates. The Government has engaged strict spending discipline with structural savings to offset the cost of key reforms. The Government will fully offset the impact of the pension increase delivered in this Budget by 2021‑22.
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