Australia 2023/24 Budget highlights

Had the government instead spent all the tax receipt upgrades in the forward estimates across this and the October budget, interest payments over the 12 years to 2033-34 would be A$83 billion higher.

Following are the highlights of Australia's 2023/24 (July-June) budget and the Treasury's key economic forecasts released on Tuesday. For a story on the budget, click

It is the second budget by the centre-left Labor government that won office last May. Comparisons are with its last budget in October. FORECASTS

SURPLUS/DEFICIT New (Pct of GDP) Oct 22 (Pct of GDP)

(In A$ bln) f'cast f'cast

2022/23 +4.2 (+0.2) -36.9 (-1.5) 2023/24 -13.9 (-0.5) -44.0 (-1.8)

2024/25 -35.1 (-1.3) -51.3 (-2.0) 2025/26 -36.6 (-1.3) -49.6 (-1.8)

GDP GROWTH 2022/23 2023/24 2024/25 2025/26

(In pct) New Old New Old New Old New Old 3.25 3.25 1.25 1.5 2.25 2.25 2.75 2.5

UNEMPLOYMENT 2022/23 2023/24 2024/25 2025/26

(In pct) New Old New Old New Old New Old 3.5 3.75 4.25 4.5 4.5 4.5 4.5 4.5

CPI INFLATION 2022/23 2023/24 2024/25 2025/26

(In pct) New Old New Old New Old New Old 6.0 5.75 3.25 3.5 2.75 2.5 2.5 2.5

* GDP is percentage change on preceding year. CPI is through the year growth to the June quarter. The unemployment rate is the rate for the June quarter. DEBT

(In A$ bln) Estimates Projections 22/23 23/24 24/25 25/26

Gross debt 887.0 923.0 958.0 1,015 % of GDP 34.9 35.8 36.3 36.5

Net debt 548.6 574.9 620.6 665.2 % of GDP 21.8 22.3 23.5 24.0

Interest payments are seen increasing on average of 8.8% per year over the next decade. COMMODITY PRICES

Key commodity prices are assumed to decline from current elevated levels over four quarters. Iron ore prices are assumed at $60 a tonne, up from $55 in the October budget, metallurgical coal at $140, up from $130, thermal coal at $70, up from $60, and LNG at $10, up from $9.

BUDGET BALANCE The underlying cash balance is estimated to be in surplus by A$4.2 billion in 2022-23, the first surplus since 2007-08. This is an improvement of A$41.1 billion compared to the October Budget. The underlying cash deficit is estimated to be A$13.9 billion, A$30.1 billion lower than the October Budget.

Over five years from 2022-23 to 2026-27, the underlying cash balance improves by a cumulative A$125.9 billion. Since October, tax receipts have been revised up by A$67.2 billion across 2022-23 and 2023-24, underpinned by a strong labour market and elevated commodity prices.

Overall, tax upgrades have improved the underlying cash balance by A$114.2 billion over five years from 2022-23 to 2026-27. To help offset additional spending, the government has identified A$32.5 billion of budget improvements and reprioritisations, bringing the total over two budgets to A$61.0 billion.

The government has returned 87% of the tax receipt upgrades across the October budget and 2023-24 budget, which includes 82% in this budget. The government has taken policy decisions of A$20.6 billion over five years from 2022-23 to 2026-27. This includes cost-of-living support, historic investment in Medicare and addressing legacy issues inherited from the previous government. Gross debt is now projected to peak at 36.5% of GDP in 2025-26, 10.4 percentage points lower and five years earlier than at the October budget, before declining to 32.3% by 2033-34

Interest payments are projected to be significantly lower over the medium term. This is largely driven by lower deficits reducing the amount of new debt issuance. Had the government instead spent all the tax receipt upgrades in the forward estimates across this and the October budget, interest payments over the 12 years to 2033-34 would be A$83 billion higher. SPENDING PLANS

A$14.6 billion cost-of-living plan will deliver up to A$3 billion in direct energy bill relief for eligible households and small businesses, co-funded with the states. More than five million households will have up to A$500 deducted from their power bills in the next financial year. Electricity price increases are expected to be around 25 percentage points less than what was projected - and 16 percentage points less for gas.

A A$40 per fortnight increase for JobSeeker recipients - plus those on other income support payments - delivered a A$4.9 billion boost in support to Australians looking for work, studying or doing apprenticeships. Housing Accord aims to build one million, new, well-located homes over five years from 2024, driven to help drive this with a new tax break for build-to-rent projects.

Budget provides A$11.3 billion to fund a 15% increase in award wages, for more than 250,000 aged care workers A A$3.5 billion boost will help GPs provide free consultations.

A$2 billion in a new Hydrogen Headstart programme will support the production and export of hydrogen power. Keywords: AUSTRALIA BUDGET/RELEASE