Overview

• The 2024–25 shortfall came in about $18 billion smaller than forecast in March, at just under $10 billion or roughly 0.4% of GDP.
• Strong employment and rising wages boosted tax receipts, with personal income tax collections near a record $350 billion.
• The government says it banked most revenue upgrades and identified more than $100 billion in savings, citing spending restraint.
• Projections still point to sizable deficits in coming years, including about $35.7 billion in 2026–27 and $37.2 billion in 2027–28 as tax cuts take effect.
• The update lands as the Reserve Bank meets on interest rates, with markets expecting the cash rate to hold at 3.6% following a slight rise in monthly inflation.