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Australian Government Coat of Arms

Budget | 2015-16

Budget 2015-16
Australian Government Coat of Arms, Budget 2015-16
  1. budget.gov.au
  2. Budget 2015
  3. Budget Paper No. 1
  4. Statement 8
  5. Fiscal risks

Statement 8 (continued)

Fiscal risks

Fiscal risks comprise general developments or specific events that may affect the fiscal outlook. Some developments or events raise the possibility of a fiscal impact. In other cases, the likelihood of a fiscal impact may be reasonably certain, but will not be included in the forward estimates because the timing or magnitude is not known. Specific fiscal risks to the budget and forward estimates are detailed below.

The estimates for the Department of Defence include the cost of major operations of the Australian Defence Force in 2015‑16. Funding is considered on a year‑by‑year basis and the forward estimates do not provide for extensions of currently approved operations beyond 2015‑16. This is consistent with past practice. Funding for Operations Accordion, Highroad, Okra, Manitou, and Resolute have been agreed to 30 June 2016. The Department of Defence will likely have additional funding requirements for major operations beyond 30 June 2016.

Since 19 July 2013, Australia has made up to A$1 billion available to the Government of Indonesia in the form of a standby loan facility, to be drawn down should Indonesia be unable to raise sufficient funds at reasonable interest rates on global capital markets due to the impact of financial market volatility. Contributions to the standby loan facility have also been provided by the World Bank, the Asian Development Bank and the Government of Japan. Australia's contribution to the facility is available to Indonesia up to 30 June 2015. A drawdown from the facility will be dependent on a request from the Government of Indonesia and subject to certain criteria being met. Any funds provided will be repaid in full with interest.

The Australian Government has supported the Gold Coast's bid to host the 2018 Commonwealth Games through the provision of commitments in areas such as immigration, customs, work permits, taxation, security, protection of commercial rights, and communications and information technology. Not all costs associated with delivery of the commitments are available at this time.

The introduction of a 1500 gigalitre (GL) cap on Australian Government water buybacks comes with a potential, but currently unquantifiable, fiscal risk for the Government. If there is a substantial shortfall in sustainable diversion limit (SDL) adjustments from supply measures, then the cap on water buybacks will be reached and other potentially more expensive means of water recovery will need to be used to meet SDLs. It will not be possible to identify whether this risk will be realised, and what the financial implications are, until the SDL adjustment mechanism operates in 2016.

There are a significant number of measures which impact on the Budget aggregates that remain subject to the legislative process. If legislation is not passed by Parliament as proposed, this may affect the estimates and projections of the Budget.