Federal budget 2023: five charts you need to see

From the biggest blowouts to inflation, income tax, revenue and a decade of deficits ahead, there’s no hiding from these economic realities buried in the budget.

From the biggest blowouts to inflation, income tax, revenue and a decade of deficits ahead, there’s no hiding from these economic realities buried in the budget.

DECADE OF DEFICITS ON THE WAY

Jim Chalmers’ second budget reveals the nation’s first surplus in 15 years, albeit a slender one at just $4.2bn. Soaring commodities prices and ‘full’ employment have delivered an income tax windfall. But the surplus is a one-off, with the budget forecast to be back in the red for the next 10 years.

TAX COMES TUMBLING IN

Income tax – most of it from individuals and companies – has surged from $318bn in Covid-hit 2019-20 to $471bn in the 2023-24 budget – an increase of almost 150% in just four years – and is forecast to reach $515.4bn in 2026-27.

TACKLING BIG BLOWOUTS

The Albanese government has sought to tackle the two biggest drivers of increased budget spenders over the next decade: the NDIS and interest payments on debt. Measures taken since the October budget have reduced the projected annual growth in spending over the next 10 years.

SPENDING MORE THAN WE EARN

Annual revenue is estimated to increase by about 10 per cent over the forward estimates to $748.2bn by 2026-27. But expenses will rise even more quickly over the same time period triggering higher deficits.

INFLATION NATION

Treasury now believes that Australia’s runaway inflation peaked in late 2022 and has now begun to moderate. Inflation is now around 7 per cent but is expected to return to the Reserve Bank’s target band of 2-3 per cent in 2024–25.