Finally some good news from the Federal Government on things budget and economic.
The final budget outcome for the 2008-09 year was a deficit of $27.1 billion, around $5 billion better than expected back in May.
Back in May 2008 the Government forecast a surplus of $21.7 billion, so the fall had been a massive $48 billion, thanks to the international credit crunch and economic slowdown.
The final outcome was around 2.3% of GDP compared to the surplus, which was estimated at 1.8% of GDP.
The Federal Government revealed the improvement yesterday from the original estimate of $32.9 billion deficit forecast in the May budget.
The better-than-expected result reflected lower than anticipated spending of $2.2 billion and higher cash receipts of $2.8 billion.
The news has economists and analysts winding back their estimates of the size of the deficit and the amount of debt to be issued in future years.
The debt pile could be as little as $200 billion instead of more than $300 billion estimated earlier in the year.
Some economists said yesterday the budget could be back in balance in two to three years time, instead of four to five years.
In a statement Mr Swan said the outcome was the result of a number of factors and the effects of the Government’s economic stimulus which has contributed to the better economic outcomes.
The Treasurer said the lower spending was due to a number of one-off factors, including a reduction in payments of $138 million for the Newstart Allowance.
"This outcome reflects in part the success of our economic stimulus which has meant more Australians in jobs and fewer Australians collecting unemployment benefits than would otherwise be the case," he said in the statement.
At the end of 2008-09, net debt was $16.1 billion (1.3% of GDP), which is $11.5 billion better than expected at the time of the 2009-10 budget.
Mr Swan said Australia still had lower debt and lower deficits than other major advanced economy.
"The level of Government net debt at 1.3 per cent of GDP in 2008-09, is dramatically better than 59 per cent of GDP reported for the major advanced economies in 2008," he said.
"The government is fully committed to its fiscal strategy to return the budget to surplus as the global economy recovers.
"This strategy will ensure Australia’s net debt remains lower than any of the major advanced economies."
Cash receipts were $2.8 billion higher than expected and total tax receipts were $3.3 billion above May estimate, primarily due to stronger than expected company income tax receipts of $3.6 billion.
Personal income tax receipts were $0.5 billion lower than expected.
On the income side Treasury said in the final budget document that total accrual revenue was $298.9 billion in 2008-09, which is $3.0 billion above the estimate in the 2009-10 Budget."
(The May, 2008 estimate was $292 billion).
"This reflected higher than expected taxation revenue of $2.9 billion and higher non-taxation revenues of $92 million.
Company tax, other individuals income tax and petroleum resource rent tax (PRRT) were the main contributors to the higher than expected taxation revenue outcome, with partial offsets from weaker income tax withholding and GST.
Company taxation revenue was $2.8 billion (4.8 per cent) above the estimate in the 2009-10 Budget.
This primarily reflected stronger than expected taxable income from some companies in the mining industry and some financial institutions (where gains on currency swap transactions are likely to have contributed to higher taxable income) and a large one off tax payment made to correct a previous underpayment.
PRRT revenue was $499 million (31.2 per cent) higher than estimated reflecting higher than assumed oil prices and lower than expected tax refund liabilities.
While total individuals and other withholding tax revenue was only $87 million above the 2009-10 Budget estimate, this result incorporated significant offsetting effects.
Revenue from other individuals income tax was $1.0 billion (3.4 per cent) higher than estimated but this was almost fully offset by lower income tax withholding of $594 million (0.5 per cent) and higher individuals refunds of $369 million (1.6 per cent).
Higher other individuals income tax reflected stronger than expected collections relating to 2007-08 income year tax assessments (in part owing to stronger than anticipated capital gains outcomes), as well as some significant compliance assessments. Income tax withholding was lower than anticipated because of weaker wage and salary incomes, particularly owing to a reduction in average hours worked.
The higher individuals refunds resulted from a greater than expected bring forward in tax return lodgements into 2008-09 (primarily from 2009-10) in response to the introduction of the Tax Bonus Payment.
GST revenue was $504 million (1.2 per cent) lower than estimated in the 2009-10 Budget. This was mainly the result of lower than anticipated revenue from transactions related to previous financial years.
Excise and customs duty taxation revenue was $365 million lower than estimated, largely owing to weakness across a range of import categories and lower than expected petrol excise.
The major upward variations in non-taxation revenue since the 2009-10 Budget estimates include:
* Higher than anticipated dividends of $280 million earned mainly by the Future Fund; and
* The recovery of $146 million in overpayments of income support benefits.
This was partially offset by lower than expected interest revenue of $193 million from the Future Fund as a result of fluctuations in the funds invested and interest rate movements and earnings.
On the spending side total accrual expenses w
