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Australian Government Coat of Arms

Budget | 2014-15

Budget 2014-15
Australian Government Coat of Arms, Budget 2014-15
  1. budget.gov.au
  2. 2014‑15
  3. Budget Overview
  4. The case for budget repair

The case for budget repair

The Government inherited a budget in urgent need of repair and is taking tough decisions to avoid decades of debt and deficits

Repairing the Budget is necessary to protect living standards and prepare for an ageing population. Without action we face a decade of deficits and debt growing to $667 billion by 2023‑24. This equates to $23,000 for every person in Australia, and would see the Government spending more on interest than on aged care by 2023‑24.

This budget position is driven by excessive and unnecessary spending. Real government spending per person has almost tripled over the last 40 years and the International Monetary Fund (IMF) warns that, without policy change, Australia would record the fastest spending growth of the top 17 surveyed advanced economies and the third largest increase in net debt as a share of the economy.

Budget repair involves cutting back on unsustainable spending and putting a stop to unconstrained increases in debt.

To restore budget sustainability the Government has focused on taking savings decisions that build over time.

As a result of the decisions in this Budget medium-term projections show:

  • surpluses building to well over one per cent of GDP by 2024‑25, taking into account future tax relief; and
  • debt lower by nearly $300 billion in 2023‑24 compared to the $667 billion at the 2013‑14 MYEFO.

Budget repair will allow us to respond to future unexpected events, and to make room for future tax relief.

Budget repair also ensures future generations are not left to pay the price for a level of Government services and support that we are simply not prepared to pay for.

We need to end the days of borrow and spend.

Without action Australia has the fastest spending growth and third largest increase in net debt

Increase in spending growth 2012-18(a)
These charts show the increase in real spending, and net debt as a per cent of GDP, for a selection of advanced economies from 2012 to 2018. Without action Australia would have the fastest increase in spending growth over this time period of the selected countries, at over 15 per cent. Australia would also record the third largest increase in net debt as a per cent of GDP over the same period, at nearly 10 per cent of GDP.
Increase in net debt 2012-18(a)
These charts show the increase in real spending, and net debt as a per cent of GDP, for a selection of advanced economies from 2012 to 2018. Without action Australia would have the fastest increase in spending growth over this time period of the selected countries, at over 15 per cent. Australia would also record the third largest increase in net debt as a per cent of GDP over the same period, at nearly 10 per cent of GDP.

Source: International Monetary Fund
a) Of the 17 countries surveyed by the IMF