Mini-Budget and Half Year Economic and Fiscal Update 2023

As anticipated, the Mini-Budget focuses on the new coalition Government’s key priority areas and 100 Day Plan, and confirms savings (and costs) associated with previously announced policy initiatives. The Half Year Economic and Fiscal Update (HYEFU) forecasts a further deterioration in economic conditions.

It is important to note that the economic forecasts included in HYEFU were finalised on 6 November 2023, and the fiscal forecasts on 24 November 2023, before the formation of the coalition Government. This means that the impact of Government announcements are not incorporated into the HYEFU forecasts.

While the Treasury anticipates that the impact of the Government’s signalled commitments will be broadly neutral over the forecast period, there is a high degree of uncertainty and downside risk to these forecasts.

Economic update

HYEFU highlights a further deterioration in economic conditions since the Pre-Election Economic and Fiscal Update (PREFU) in September. 

The economy is forecast to slow over the next two years, largely due to elevated interest rates increasing the cost of borrowing and servicing of net debt. Strong net migration and increasing international tourism are expected to provide some offset. 

HYEFU forecasts the return to an operating balance surplus of $0.1bn in 2026/27, compared with the $2.1bn surplus forecast at PREFU.

Mini-Budget announcements and other priority initiatives may impact the economic and fiscal outlook, particularly in relation to GDP, employment, and the forecast return to surplus. 

Mini-Budget 2023

The focus of the Mini-Budget is on quantifying previously signalled targeted savings (and additional revenue) and priorities for Budget 2024. Further detail on spending priorities will be provided in the Budget Policy Statement in March 2024, ahead of the Budget in May. 

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