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Australian Federal and State Budgets - An Overview

Progress Towards Fiscal Responsibility Act 2005 Targets: 2009-1090

Reducing the Level of Government Net Financial Liabilities, as a Proportion of Gross State Product, to 7.5 per cent (or less) by 30 June 2010 Maintaining General Government Net Debt, as a proportion of Gross State Product, at (or below) its 30 June 2005 level (0.9 per cent of GSP) Reducing the Level of General Government Net Financial Liabilities, as a Proportion of Gross State Product, to 6 per cent (or less) by 30 June 2015 Maintaining Underlying General Government Sector Net Debt, as a Proportion of Gross State Product, at (or

General Government Net Financial Liabilities Estimated to be 14.5 per cent, of Gross State Product, at 30 June 2010

  • Falling to 12.6 per cent by 2013

As a Result of the Increased Capital Program, General Government Net Debt is Estimated to be 3.4 per cent of GSP at 30 June 2010 General Government Net Financial Liabilities Estimated to be 12.6 per cent of GSP at 30 June 2013

General Government Sector Net Debt Estimated to be 3.6 per cent of GSP at 30 June 2013

below) its 30 June 2005 level (0.8% of GSP) - Unless an Increase is Required, in Net Debt, to Reduce One or More Components of General Government Net Liabilities Eliminating Total State Sector Unfunded Superannuation Liabilities by 30 June 2030

Total State Underlying Net Unfunded Superannuation Liabilities Estimated to be $33.8 billion in June 2009 (9 per cent of GSP- Decreasing to $30.8 billion in June 2013 (7 per cent of GSP)

What happens after the GFC is also a consideration for the state’s budget, given the targets the government has set for itself. Much has been made of the “two speed economy”: the difference in growth rates between the resource-rich states of Western Australia and Queensland, on the one hand, and New South Wales and the remaining states on the other. A better comparison might be between New South Wales and Victoria: both of which have production based much more on commerce and industry. At any rate, the “two speed economy” was highlighted by the Reserve Bank of Australia (RBA) in its submission to the Senate Select Committee on State Government Financial Management. Included in the RBA’s submission was the following graph of state-by-state GSP growth between 1970- 71 and 2006-07:

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NSW Treasury, Budget Statement 2009-10 (NSW Treasury, Sydney, 2009), Budget Paper No. 2, Appendix A.

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