Overview
- The update projects a 2025–26 underlying cash deficit of $36.8 billion, about $5.3–$5.4 billion smaller than pre‑election forecasts.
- Across the forward estimates, the bottom line improves by $8.4 billion, supported by $20 billion in identified savings and net policy decisions that add $2.2 billion to the balances.
- Stronger receipts drive the gains, with personal income tax revised to a record $357.9 billion, higher company tax, surging super tax collections, and firmer iron ore and gold prices.
- Treasury lifts inflation to about 3.75% in 2025–26 and trims growth, with unemployment seen at 4.5%, pointing to weaker real wages and increased risk of an RBA rate hike in early 2026.
- Short‑term pressures include an extra $6.3 billion for disasters and $3 billion for pensions, the home battery subsidy is capped and reworked to roughly $7.2 billion over four years, and gross debt is now forecast near $993 billion at end‑2025–26.