The Albanese government has reported a major improvement in Australia’s finances, with the federal budget deficit slashed by $18 billion — a result of robust employment growth, higher wages, and careful spending control.
Treasurer Jim Chalmers declared that Australia now has “one of the strongest budgets in the G20”, noting that the country has achieved “more progress on the budget in three years than any government in history”.
The 2024–25 Final Budget Outcome, to be officially released on Monday, shows a deficit of $10 billion, far lower than the $27.9 billion forecast in the Pre-election Economic and Fiscal Outlook (PEFO) earlier this year — marking a dramatic turnaround for the nation’s fiscal position.
Chalmers emphasised that the Albanese Labor government had turned two large Liberal deficits into two significant Labor surpluses in its first two years and had continued to reduce debt in its third year. “This year’s deficit is around a fifth of what we inherited from the Coalition and about a third of what was projected before the election,” he said.
The improvement was driven by stronger-than-expected tax revenue, underpinned by a thriving labour market that has created over 1.1 million jobs and rising real wages that have lifted household income and spending.
Finance Minister Katy Gallagher said the “results haven’t happened by accident”, pointing to over $100 billion in identified savings, spending restraint, and the government’s decision to bank the majority of unexpected revenue gains.
At the same time, Gallagher stressed, the government has continued to deliver for Australians, with cost-of-living relief, tax cuts for every taxpayer, cheaper childcare, energy bill support, and record investments in Medicare.
“This is what responsible economic management looks like,” she said, “strengthening the budget bottom line while helping Australians weather the cost-of-living pressures.”
