The Final Budget Outcome for 2021-22 shows an improved Budget position last year off the back of a near-term boost in revenues and delays in payments and projects.
It shows that billions of dollars that were promised by our predecessors were not delivered - much of which will now need to be funded in 2022-23 and beyond.
The Budget underlying cash deficit was $32.0 billion (1.4 per cent of GDP) in 2021-22.
The improvement is the result of higher-than-expected receipts of around $27.7 billion and lower than budgeted for payments of $20.1 billion.
Despite this improvement, Australians are still burdened with a multi-billion-dollar deficit and a trillion dollars of debt which is getting more and more expensive to service.
There are no guarantees that all of the factors driving the improved outcome will be sustained over the longer term.
More than half of the $27.7 billion boost to receipts was due to higher-than-expected company taxes - largely the result of commodity prices remaining higher for longer than assumed and a lower-than-expected take-up of COVID-19 business support, such as temporary full expensing and loss carry back.
Payments were $20.1 billion lower than expected largely due to delays in contracting COVID-19 spending, supply chain disruptions and capacity constraints delaying road and rail infrastructure projects, along with lower-than-expected demand for health, NDIS and aged care services.
More than half of these payment delays will spill over to future years.
Australia faces more substantial pressures that will have an ongoing impact on our fiscal position including higher costs of servicing government debt, increased spending on government payments from higher indexation, and underlying spending growth in areas such as NDIS, health, aged care and defence.
Australians are under no illusions about the enormity of the economic challenges ahead of us.
But despite all that is stacked against us, Australians have every reason to be optimistic about the future.
The 2022-23 October Budget will lay the foundations for the better future that Australians deserve – providing responsible cost-of-living relief, investing in the potential of our people and capacity of our economy, and beginning the hard task of longer term Budget repair.
It will take more than one Budget to make up for nine years of missed opportunities and messed-up priorities under the Liberals.
But together we will build a Budget and an economy that is as strong and resilient as the Australian people.