Chalmers applauds $22bn Budget deficit

The Budget deficit in 2025-26 was $22.3 billion, according to the Final Budget Outcome (FBO), with Treasurer Jim Chalmers saying the figure it still $6 billion better than the $28.3 billion estimated in the 2026-27 Budget.

As a share of the economy, the deficit was 0.8% of GDP.

"The Final Budget Outcome shows the 2025-26 deficit is billions of dollars better than forecast in the Budget," Chalmers said.

"We made a lot of progress in the Budget and we've continued to make even more progress since then. This multi-billion-dollar improvement has been delivered despite months of more severe global volatility."

Chalmers said the outcome has proven the government's responsible economic management, which was recently reaffirmed by Australia keeping it's AAA credit ratings, he said.

"We have one of the strongest budgets in the G20 and much lower gross debt than every major advanced economy," Chalmers said.

"The FBO result is better than expected at Budget because of lower-than-expected payments and an improved outcome for receipts."

Payments were $1.4 billion lower in 2025-26 than estimated at Budget. Tax receipts were $4.6 billion above the Budget forecast, driven by higher-than-expected collections from stronger super fund and investment income.

"We have limited real spending growth, delivered substantial savings and reprioritisations, and returned around 75% of all tax receipt upgrades to the bottom line, compared to our predecessors who only returned around 40%," Chalmers said.

"Our predecessors had bigger deficits and more debt. They would have kept deficits well above 1% of GDP well into the 2030s. All four of the Budget outcomes delivered under this government have been much stronger than that."

Chalmers said while the FBO delivered "substantial improvement" he acknowledged harsh economic conditions continue to weigh on Australian households.

"While we've delivered a substantial budget improvement, we recognise that structural pressures are intensifying rather than easing and we're taking decisive action to address some of the biggest spending pressures on the Budget," he said.

"The government is focused on building a more productive and resilient economy and managing global uncertainty, and a big part of that is our responsible management of the Budget."