Senate Economics Legislation Committee, , 6:49:20 to 6:52:23
Analysis of the tax-to-GDP ratio reaching 24.1% and a discussion on running deficits during periods of full employment and high commodity prices.
Topics: Government spending, Efficiency dividend
Speakers: Hon Katy Gallagher, Senator Andrew Bragg, Unknown Speaker, Damien White
Uh through the ERC process. Um, you know, you there is a rigorous assessment of uh the new policy proposals or any new requests for spending.
Okay, so tax tax, let's go to tax digit GDP. So 2526 is going to hit 24.1% of the economy.
That was at the end 2005-6.
Okay. And then was the budget in deficit or surplus?
The historical table shows a look, Senator.
The glory is before the NDIS, before the pressures on the aged care system and before the pressures on defence. I mean, this is the reality. The budget is different to the budget that existed in 2005. And any comparison to say that it's very similar. Oh, the Commonwealth is doing the same responsibilities that were undertaken in 2005 to 2026 is simply incorrect.
So I'm just going to take you to a couple of comments made by some recently. So Phil Lowe said now we find ourselves running sizable budget deficits at a time where we're at full employment and commodity prices are very high. We should be running sizable surpluses.
Well, uh in is that question at me? Well, I what I would say to Phil is that we have uh taken just taken difficult decisions on the big driving uh programs where we're seeing considerable growth, like in aged care and in NDIS. Uh we have halved the deficits uh from what were uh forecast. We have bought, I think the budget bottom line has improved in every single budget or budget update that we have handed down. We've delivered two surpluses, we've lowered the debt from uh what was forecast and lowered interest on that debt, and we take the job of managing the budget responsibly very seriously, but we also acknowledge that the government has to fund investments into programs that the community cares about, and that is hospitals and that is Medicare, and that is bolt billing, and that is mental health care, and it is aged care. Uh in all of those areas, it's defence and national security. It's making sure the pensions and payments are provided on time and the demands on the federal budget are increasing, not decreasing in all of those areas, and that is something that we have to manage.