SYDNEY, Sept 28 (Reuters) – Australia reported a final budget deficit of A$22.3 billion ($15.65 billion) for the year to June 2026, better than previously expected, as lower spending and stronger tax receipts boosted the government’s bottom line, Treasury said on Monday.
• Figures from the Final Budget Outcome 2025/26 showed a deficit of about 0.8% of gross domestic product but smaller than a deficit of A$28.3 billion forecast earlier this year, Treasury said.
• That compared with an A$10 billion deficit for the 2024/25 financial year that ended two years of surpluses.
• The budget position improved due to lower payments across a range of welfare programmes and better-than-expected tax receipts from businesses and investment income earned by pension funds, Treasury said.
• “Despite this very welcome improvement in the budget, we know that pressures are intensifying rather than easing,” said Treasurer Jim Chalmers at a press conference.
• The government earlier in the year forecast the budget deficit would widen to A$31.5 billion in the 2026/27 financial year, but the fiscal backdrop has darkened since then, with a global bond rout driving yields sharply higher and raising the borrowing costs for all governments.
• The Reserve Bank of Australia is widely expected to raise interest rates for a fourth time to 4.6% on Tuesday to tame sticky inflation and slow down demand. The labour market has, meanwhile, stayed resilient, with the unemployment rate hovering at 4.6%.
($1 = 1.4245 Australian dollars)
(Reporting by Stella Qiu; Editing by Muralikumar Anantharaman)
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