ABS Government Financial Estimates released today show that the Australian Government is budgeting a fiscal surplus of $10.8 billion in 2006‑07.
In contrast, the States and Territories are budgeting a cumulative fiscal deficit of $4.9 billion in 2006-07, including deficits of over $2.4 billion and $1.7 billion for NSW and Queensland, respectively.
This represents a significant call on financial markets a point raised by the former Reserve Bank Governor in August this year.
The ABS has now revised its estimate of the operating deficit of NSW to $711 million.
These deficits have come at a time when the States are receiving $39.1 billion in GST revenue, including a $1.8 billion windfall due to tax reform.
Further borrowings planned by the States and their public trading enterprises over the forward estimates are estimated to result in an increase in net debt of $47.9 billion between 2005‑06 and 2009‑10. This debt level is approximately half of the $96 billion government net debt built up by the former Commonwealth Labor Government. Commonwealth net debt has now been reduced to zero.
ABS Government Financial Estimates, General Government, 2006-07
NB: The sum of all individual state jurisdictions may not agree with total state figures, due to transfers between jurisdictions.