The Final Budget Outcome for 2024-25 shows the Albanese Labor Government has delivered the largest nominal improvement in the Budget in a single Parliamentary term.
In dollar terms, we've made more progress on the Budget in three years than any government in history.
It's a reminder that we have one of the strongest budgets in the G20.
Responsible economic management is the hallmark of the Albanese Labor Government and today's result reinforces that.
We've turned two big Liberal deficits into two substantial Labor surpluses in our first two years, significantly reduced the deficit in our third year, and continued to pay down debt.
Today's figures show that the deficit in our third year is around a fifth of the forecast we inherited from the Coalition, and around a third of the forecast in the 2025 Pre‑election Economic and Fiscal Outlook (PEFO).
The 2024-25 FBO shows an underlying cash deficit of just under $10.0 billion (0.4 per cent of GDP), which is substantially lower than the forecast deficit of $27.9 billion in the 2025 PEFO and $47.1 billion in the 2022 PEFO.
As a proportion of GDP, it is around a fifth of the average deficit recorded between the Global Financial Crisis and the pandemic.
This outcome means the fiscal position is $209 billion better over the three years to 2024‑25 than the one we inherited.
Added together, our three Final Budget Outcomes have delivered a cumulative underlying cash balance of +$28 billion, compared with the more than −$181 billion we inherited.
The better fiscal position means gross debt in 2024-25 was $188 billion lower than the one left to us, avoiding over $60 billion in interest costs over the 11 years to 2032-33.
The budget is in much better nick because we've paid down almost $200 billion of Liberal debt, demonstrated spending restraint, overseen the creation of more than 1.1 million jobs and got real wages growing again.
This result is better than expected at the 2025 PEFO, thanks to lower‑than‑expected payments and an improved outcome for receipts.
The FBO shows that payments were $4.9 billion lower in 2024-25 than projected at 2025 PEFO. This meant that payments as a share of the economy declined across the last term to be 26.2 per cent in 2024-25, which was 0.4 of a percentage point less than what was forecast at the 2022 PEFO.
A stronger labour market with more Australians working more and earning more is among the biggest factors for the improved outlook for receipts since coming to Government.
Receipts were $13.0 billion higher in 2024-25 than projected at the 2025 PEFO, with more Australians earning more being an important driver.
We've managed to get inflation down and improve the budget position without sacrificing the gains we made in the labour market.
We have limited real spending growth and returned around 70 per cent of all tax receipt upgrades to the bottom line, compared to our predecessors who only returned around 40 per cent.
Our responsible economic management has helped make room in the budget for critical investments in Medicare, housing, and tax cuts for every taxpayer.
While we've delivered a substantial budget improvement, we recognise that structural pressures are intensifying rather than easing and that's why we're taking decisive action to address some of the biggest spending pressures on the budget.
We're delivering substantial reforms to the National Disability Insurance Scheme and aged care system, and we're paying down Liberal debt which is saving us tens of billions of dollars in interest payments.
The Final Budget Outcome is a powerful demonstration of the progress Australians have made together on the economy but there's more work to do to make the budget more sustainable in the face of global economic uncertainty.
We'll continue to do what we can to clean up the budget mess we inherited from the Coalition and to make our economy more productive and resilient.
