Jim Chalmers is on track to oversee the highest-taxing government in Australian history, with fresh budget figures showing tax revenue has climbed to near-record levels as a share of the economy.
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revenue → oversee → economy
The Final Budget Outcome for 2025-26 reveals tax receipts reached 24.1 per cent of GDP, higher than the 23.6 per cent forecast in the May budget and above the 23.9 per cent tax-to-GDP cap set by former Coalition finance minister Mathias Cormann.
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receipts → reveal → Cormann
The result leaves Labor just short of the modern record of 24.2 per cent, set during the Howard government at the height of the mining boom.
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result → leave → boom
Meanwhile, government spending remains elevated, with payments accounting for 26.9 per cent of GDP, one of the highest levels recorded outside the pandemic.
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payments → remain → pandemic
The figures come as markets increasingly expect the Reserve Bank to lift interest rates, with investors pricing in multiple potential hikes as inflation intensifies following the conflict in the Middle East and surging oil prices.
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inflation → come → East
The budget outcome showed an underlying cash deficit of $22.3 billion, which was $6 billion better than the $28.3 billion deficit forecast in May.
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which → show → May
Gross debt was also $10.6 billion lower than forecast at the end of the financial year.
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debt → forecast → year
Chalmers defended the government's fiscal management, insisting the budget position has improved markedly since Labor came to office.
'The bottom line is better than we inherited, better than it was at the election, and better than it was forecast to be in May,' Chalmers said on Monday.
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Chalmers → defend → Monday
Jim Chalmers (pictured) said the budget was an improvement from the previous May forecast
'
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budget → picture → forecast
It is now around half the deficit for the year just finished compared to when we came to office.
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we → finish → office
The Treasurer said the overall budget had improved by $230 billion since Labor took power, with debt $197 billion lower than projected when the government was elected.
'It now means that the aggregate improvement to the budget in our time in office is $230 billion better when it comes to the underlying cash balance, and there is $197 billion less debt,' he said.
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he → say → debt
The stronger-than-expected budget outcome was largely due to higher tax collections.
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outcome → expect → collections
Individual income tax receipts came in $2.3 billion above forecast, superannuation tax receipts exceeded expectations by $1.9 billion, and company tax receipts were up $700 million.
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receipts → come → billion
Chalmers rejected claims the improvement was driven by bracket creep or a mining windfall.
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improvement → reject → creep
'I want to be really clear that the improvement in receipts is not from commodities; in fact, mining profits came in lower than anticipated,' he said.
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he → want → fact
It is overwhelmingly from higher superannuation and investor income than what we anticipated in the Treasury's forecasts in May.'
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we → anticipate → May
Albanese government tax receipts came in higher than expected in the last year
He repeatedly said that investment returns, rather than higher wages, were behind most of the revenue gain.
'
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returns → come → gain
So to be really clear about that, this is not about wage and salary earners, it's not about commodity prices, it's about higher than expected super and investor income.'
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it → expect → prices
Finance Minister Katy Gallagher also defended the government's approach, saying Labor had exercised spending restraint while strengthening the budget position.
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Labor → defend → position
'The deficit has come in lower.
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deficit → come → ?
We've delivered a stronger budget than we inherited in every year since we've been in office,' she said.
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she → deliver → office
The budget over the last four years is $230 billion, or almost a quarter of a trillion dollars, better than what we inherited.'
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we → inherit → what
Opposition Leader Angus Taylor said the figures showed Labor was collecting more tax while increasing spending and debt.
'More spending, more taxation, more debt, rising interest payments and, of course, a government that has lost control of the economy
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that → say → economy
,' Taylor said on Monday.
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Taylor → say → Monday
He said government spending had surged to 26.9 per cent of GDP, the highest level outside the pandemic in four decades, while tax receipts had climbed to 24.1 per cent of GDP.
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receipts → say → GDP
Angus Taylor (pictured) said spending was highest ever outside the pandemic in four decades
'This government is clawing more out of Australians,' he said.
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he → picture → Australians
Taylor said bracket creep was fuelling higher income tax collections and argued the government would be in surplus if it had offset its spending.
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it → say → spending
'We're still in a substantial deficit, $22 billion, and of course interest payments are rising,' he said.
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he → rise → course
With markets expecting another Reserve Bank rate rise on Tuesday, Taylor accused Labor of fuelling inflation through excessive spending and warned households would continue to pay the price.
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households → expect → price
The Aporia
