Peter Costello

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1999-2000 Final Budget Outcome

NO.093

1999-2000 Final Budget Outcome

In 1999-2000, the Commonwealth general government sector achieved an underlying cash surplus of $12.7 billion and an accrual fiscal surplus of $13.5 billion. In dollar terms, this is the largest budget surplus ever recorded by an Australian Government. As a proportion of GDP, this is the largest surplus since 1971-72.

The fiscal surplus of $13.5 billion was $3.8 billion higher than estimated at the 2000-01 Budget. Stronger than expected taxation revenue and lower expenses both contributed to the higher than expected surplus in 1999-2000.

  • Revenue was around $2.0 billion higher than estimated at the 2000–01 Budget. The additional strength in revenue was due to a combination of some one-off factors and stronger than anticipated growth in company and small business profits.
  • Expenses were around $2.0 billion lower than estimated at the 2000-01 Budget. This outcome reflects lower than anticipated spending by a number of agencies and across several functions. Expenditure on demand-driven programmes (such as personal benefits payments) was largely as forecast at the 2000-01 Budget.

The surplus in 1999-2000 follows two previous underlying cash surpluses of $1.2 billion in 1997-98 and $4.2 billion in 1998-99. The Government is forecasting surpluses right across the forward estimates while economic growth continues. These results are consistent with the Government’s commitment to maintain the Budget in surplus while Australia’s economic growth prospects remain sound.

The budget surplus recorded in 1999-2000 enabled the Government to reduce the level of Commonwealth general government net debt by $17.5 billion. Net debt has fallen since its peak of 20 per cent of GDP in 1995-96 to just 8 per cent of GDP at 30 June 2000. In dollar terms, the Coalition government has now repaid around $43 billion of net debt since 1996-97.

The combination of sustained fiscal surpluses and the low level of net debt places Australia in a much stronger fiscal position than most comparable OECD countries.

An electronic version of the 1999-2000 Final Budget Outcome document can be found at: www.budget.gov.au

29 September 2000

29 Sep 2000

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