Australia’s Fiscal Outlook Worsens as Spending Outpaces Revenue

Australia’s fiscal position has deteriorated in the past year as rising expenses across federal, state and territory governments outstripped stronger-than-expected revenue, according to the Parliamentary Budget Office.

The deteriorating outlook highlights the growing strain on public finances as higher demand for spending across all levels of government overwhelms solid revenue gains. That pushes a return to budget surpluses further out and leaves national debt climbing over the next several years, the latest National Fiscal Outlook released Thursday showed.

Combined budgets for 2025-26 showed a weaker profile than the October 2024 update, with most jurisdictions recording a deterioration in key aggregates, ...