An Australian federal budget is a document that sets out the estimated revenues and expenditures of the Australian Treasury in the following

financial year A fiscal year (also known as a financial year, or sometimes budget year) is used in government accounting, which varies between countries, and for budget purposes. It is also used for financial reporting by businesses and other organizations. La ...

, proposed conduct of

Australian government The Australian Government, also known as the Commonwealth Government or simply as the federal government, is the national executive government of Australia, a federal parliamentary constitutional monarchy. The executive consists of the pr ...

operations in that period, and its

fiscal policy In economics and political science, fiscal policy is the use of government revenue collection ( taxes or tax cuts) and expenditure to influence a country's economy. The use of government revenue expenditures to influence macroeconomic variab ...

for the forward years. Budgets are called by the year in which they are presented to Parliament and relate to a financial year that commences on the following 1 July and ends on 30 June of the following year, so that the budget brought down in May relates to the / financial year (1 July – 30 June , FY). Revenue estimates detailed in the budget are raised through the Australian taxation system, with government spending (including transfers to the states) representing a sizeable proportion of the overall

economy An economy is an area of the Production (economics), production, Distribution (economics), distribution and trade, as well as Consumption (economics), consumption of Goods (economics), goods and Service (economics), services. In general, it is ...

. Besides presenting the government's expected revenues and expenditures, the federal budget is also a political statement of the government's intentions and priorities, and has profound

macroeconomic Macroeconomics is a branch of economics that deals with the performance, structure, behavior, and decision-making of an economy as a whole. This includes regional, national, and global economies. Macroeconomists study topics such as output/ GDP ...

implications. Australia follows, to a great extent, the conventions of the

Westminster system The Westminster system, or Westminster model, is a type of parliamentary system, parliamentary government that incorporates a series of Parliamentary procedure, procedures for operating a legislature, first developed in England. Key aspects of ...

. For example, the

prime minister A prime minister or chief of cabinet is the head of the cabinet and the leader of the ministers in the executive branch of government, often in a parliamentary or semi-presidential system. A prime minister is not the head of state, but r ...

must have the support of a majority in the

House of Representatives House of Representatives is the name of legislative bodies in many countries and sub-national entities. In many countries, the House of Representatives is the lower house of a bicameral legislature, with the corresponding upper house often ...

, and must in any case be able to ensure the existence of no

absolute majority A majority is more than half of a total; however, the term is commonly used with other meanings, as explained in the " Related terms" section below. It is a subset of a set consisting of more than half of the set's elements. For example, if a gr ...

against the government. In relation to the budget, that requires that if the House fails to pass the government's budget, even by one dollar, then the government must either resign so that a different government can be appointed or seek a

parliamentary dissolution The dissolution of a legislative assembly (or parliament) is the simultaneous termination of service of all of its members, in anticipation that a successive legislative assembly will reconvene later with possibly different members. In a democrac ...

so that new general elections may be held in order to re-confirm or deny the government's mandate.

Process

The process of putting together the budget begins in November when the Central Budget Management System (CBMS) is updated with the latest estimates, and the senior ministers' review, where the

Prime Minister A prime minister or chief of cabinet is the head of the cabinet and the leader of the ministers in the executive branch of government, often in a parliamentary or semi-presidential system. A prime minister is not the head of state, but r ...

Treasurer A treasurer is a person responsible for the financial operations of a government, business, or other organization. Government The treasury of a country is the department responsible for the country's economy, finance and revenue. The treasure ...

, and Minister for Finance meet to establish the policy priorities and strategy for the coming financial year. The outcome of the senior ministers' review determines how the different portfolios will prepare their budget submissions for cabinet. Agencies within each portfolio do not submit a request for new funding, because their potential savings within the agency are unfounded. After Finance has agreed to the costings, the submissions are circulated for coordination comments and lodged with the cabinet office by late February. The Expenditure Review Committee (ERC), a committee of Cabinet, meets in March to consider all submissions. They decide which proposals will be funded and the level of funding each will receive. At the end of the ERC, the ad hoc revenue committee meets to make decisions on the revenue streams of the budget. A pre-budget review of the estimates is conducted after all decisions have been finalised to ensure that they are reflected in CBMS. Budget documentation commences at the end of the ERC process. Agencies prepare two components: the portfolio budget statements and the mid-year economic and fiscal outlook. The portfolio budget statements provide additional details and explanations of the budget and the statement of risks, which is included in Budget Paper No. 1. The final budget is presented and tabled in Parliament by the Treasurer on budget night as part of the Second Reading of the ''Appropriation Bill (No. 1)'', which "appropriates money out of the Consolidated Revenue Fund for the ordinary annual services of the government".

Charter of Budget Honesty Act

The budget has to be presented within the framework that has been established by th
Charter of Budget Honesty Act (1998)
The charter provides for: * sound fiscal management of the Australian economy * open dissemination about the status of public finances * transparency in Australia's fiscal policy

Budget night

Between 1901 and 1993, the practice was for the budget to be brought down in August, on the first Tuesday night of the Spring session. Since 1994, the Treasurer has presented the budget on the second Tuesday in May, with the exceptions of 1996 (due to an election and a change of government in March, the budget was brought down in August), 2016 (it was held on the first Tuesday in May to allow the

government A government is the system or group of people governing an organized community, generally a State (polity), state. In the case of its broad associative definition, government normally consists of legislature, executive (government), execu ...

to potentially call a

double dissolution A double dissolution is a procedure permitted under the Australian Constitution to resolve deadlocks in the bicameral Parliament of Australia between the House of Representatives (lower house) and the Senate (upper house). A double dissolutio ...

election following the presentation of the budget), 2019 (when an election called for 18 May caused the budget to be brought forward to 2 April), 2020 (when it was postponed to October due to the

COVID-19 pandemic The COVID-19 pandemic (also known as the coronavirus pandemic and COVID pandemic), caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), began with an disease outbreak, outbreak of COVID-19 in Wuhan, China, in December ...

and 2022 (when an election called for May caused the budget to be brought forward to 29 March). On budget day, but before the presentation of the budget, the Treasurer spends the day behind locked doors briefing media and interest groups on various aspects of the budget. This is known as the budget lock-up.Invitation to the 2013–14 lock-up
/ref> Because of the market sensitive nature of some of the information which they are being provided, those invited to attend the briefings are not allowed access to the outside world until the budget has been presented in Parliament by the Treasurer, which normally commences at 7.30 pm. In modern times, the budget has been broadcast live from Parliament House on the ABC and

Sky News Australia Sky News Australia is an Australian news channel owned by News Corp Australia. Originally launched on 19 February 1996, it broadcasts rolling news coverage throughout the day, while its prime time lineup is dedicated to opinion-based programs fe ...

. It is hosted on the ABC, without interruption from 7:30 pm to 8 pm, normally followed up with a report by a panel assessing the changes, benefits and flaws in the budget. Additional budget documents and materials are available on the governmen
budget website
for other interested parties. A convention in Australian politics is that the

Leader of the Opposition The Leader of the Opposition is a title traditionally held by the leader of the Opposition (parliamentary), largest political party not in government, typical in countries utilizing the parliamentary system form of government. The leader of the ...

is given a "right of reply", which they deliver in Parliament two days after the government's budget speech, and which is also broadcast on television.

Footnotes

References

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External links