The Australian Government’s fiscal strategy is designed to maintain the economic prosperity and welfare of Australians as mandated by the Charter of Budget Honesty Act 1998 (the Charter). The Treasury will assist ministers to discharge their responsibilities under the Charter.
Australia has a relatively strong fiscal position by international standards. However, long-term fiscal challenges remain including those associated with an economy transitioning from a mining investment boom to broader-based drivers of growth. Commonwealth debt as a share of gross domestic product, both on a gross and net basis, are at peak levels last seen during the 1970s and 1990s respectively. While these debt levels are not of an immediate concern, given historically low interest rates and a growing economy, Australia will be more exposed than has previously been the case, should Australia experience a significant negative economic shock.
Fiscal reform to ensure a sustainable fiscal position is challenging. Many variables, including interest rates, commodity prices and global economic growth, are outside of the Government’s direct control.
- Co-ordinate the preparation of the Commonwealth Government Budget and other documents required under the Charter including the Mid-Year Economic and Fiscal Outlook and the Final Budget Outcome.
- Provide advice on the Government’s fiscal strategy and budget position over the forward estimates and the medium term.
- Provide advice to Government aimed at ensuring the Australian taxation system delivers a sustainable revenue base for the next generation.
- Make financial assistance payments to State and Territory Governments in accordance with the requirements of the Intergovernmental Agreement on Federal Financial Relations.
- Provide advice to Government on spending proposals related to energy, industry, innovation, regional, agriculture, infrastructure, environment and communications policies.
- Provide advice to Government on the retirement income system, drawing on fiscal, tax and market regulation considerations, and facilitate timely implementation of measures resulting from this
- Provide advice to Treasury portfolio ministers on major social policy initiatives, with a focus on the efficiency and sustainability of key Government services.
- Coordinate the Government’s legislative program for tax and superannuation, financial system, corporations, competition and consumer legislation in accordance with the Government’s priorities.
Requirements of the Charter of Budget Honesty Act 1998 are met; with the timely production of regular fiscal reports (i.e. the Budget, Mid-Year Economic and Fiscal Outlook and the Final Budget Outcome).
Government measures to improve fiscal sustainability are legislated and implemented in a timely manner; measured by the regular assessment of progress and milestones.
Payments to State and Territory Governments are timely, accurate and made in accordance with the terms in the relevant agreement and the requirements of the Intergovernmental Agreement on Federal Financial relations.
Ongoing development of the Treasury’s modelling and forecasting capability, including economic and revenue forecasting tools and methods; improving the understanding of developments in the economy.
Performance will be measured by achievement of agreed project milestones and outcomes, in particular for the economy-wide macroeconomic project and redevelopment of the retirement income and asset model project.