On Wednesday, Finance Minister Katy Gallagher and I will hand down the first budget update of the Albanese Labor government's second term.
It will be all about delivery, responsibility and restraint.
We will deliver on our promises, make room for big pressures on the budget, and update our forecasts.
No government in Australia's history has delivered a bigger nominal improvement to the bottom line than this one, we've delivered the first surpluses in almost 2 decades, a much smaller deficit last year, and that's meant much less debt than we inherited.
We'll make even more progress in the mid‑year update on Wednesday.
That progress won't be accidental or coincidental, it will be deliberate, and the direct result of the fine balances we've struck and the tough decisions we've made to prioritise responsible economic management.
The mid‑year budget update will include $20 billion in additional savings and reprioritisations to improve the budget bottom line.
It's a powerful demonstration of Labor's responsible economic management.
We have identified savings in every single one of our 7 budget updates.
The substantial savings we've found in this one mean the Albanese government has now delivered $114 billion in savings and reprioritisations since coming to office.
This is around 5 times more than the Coalition delivered in their last 7 budget updates combined. In fact, the $20 billion in savings we detail this week are roughly equivalent to the savings and reprioritisations it took our predecessors 7 updates to find.
We've kept average real spending growth to around half the 30‑year average and much less than what our predecessors averaged.
We've also got payments as a share of the economy down from almost a third to around a quarter and it's forecast to be a bit above that over the next couple of years.
Finding savings and restraining spending are essential elements of our economic strategy in this mid‑year update.
But this sensible and responsible approach to the nation's finances isn't an end in itself, it's the foundation from which we can deliver on our commitments and reform our economy.
2025 is all about delivery and so is the mid‑year update.
From building more homes to new training opportunities and more mental health centres, the mid‑year budget update will deliver what matters most for Australians.
It will provide billions of dollars to help deliver the policies and programs Australians voted for at the election.
We're able to deliver the essential services and infrastructure Australians need and deserve because we're managing the budget responsibly.
Along with funding our commitments, we've made room for substantial and unavoidable pressures on the budget without a substantial deterioration in the bottom line.
The figures we release on Wednesday will show we've put aside an additional $6.3 billion for disaster relief as previous disasters are proving to be more costly, an extra $3 billion more in support for seniors on the age pension, an extra $2.1 billion more for military superannuation schemes, an extra $2 billion for veterans, and more.
We take our responsibilities to veterans and older Australians very seriously and we'll always make room in the budget to do the right thing by people and that's what we've done in the mid‑year update.
Wednesday is also an opportunity for Treasury to update its economic forecasts.
The mid‑year update will confirm our economy continues to gather momentum in the face of substantial global uncertainty.
An important feature of this is the private sector recovery that we've been planning for and preparing for, which is really starting to take shape.
The mid‑year update forecasts a further pick up in business investment off the back of big increases in private sector spending on new technology and renewable energy.
Updated estimates for business investment will show the forecast in 2025-26 has doubled to 3 per cent. That's very good for our economy and our budget.
Since we came to office, new business investment has grown by an annualised average of 3.9 per cent, compared to negative 1.3 per cent growth under our predecessors.
Productivity has now grown for 4 consecutive quarters, in annual terms it's growing at 0.8 per cent, and 1.1 per cent in the market sector.
While there's more to do to make our economy more productive and deal with the challenges coming at us, the mid‑year update will highlight Australia's enviable combination of low unemployment, high participation, real wages growth and an economy and private sector that are strengthening.
Whether it's the big turnaround we've engineered in the budget, the $114 billion in savings we've found since coming to government or the big increase in business investment driving the private sector recovery that will be a prominent feature of Treasury's updated forecasts on Wednesday, we've made a lot of progress together.
We'll build on this progress in the mid‑year update with more savings and more spending restraint that enables us to make room for the things that matter most to Australians.
Responsible economic management is a defining feature of the Albanese government and it will be a defining feature of the mid‑year budget update this week as well.
