The 2017–18 Budget papers include projections of the underlying cash balance, net debt and net financial worth to 2027–28 but do not include projections of receipts and payments beyond the forward estimates period ending 2020–21.
In this report the Parliamentary Budget Office (PBO) provides detailed projections of receipts and payments over the period beyond the forward estimates to 2027–28 to explain the main drivers of the projected return to surplus, fall in net debt, and increase in net financial worth over this period.
The detailed projections contained in this report increase the transparency of the aggregate projections and highlight the policy trade-offs that are being made, the impact on the budget of significant programs that mature beyond the forward estimates period and identify potential areas of the budget that present challenges for ongoing sustainability. While medium-term projections are subject to uncertainty this information is important in understanding the direction of fiscal policy settings.
As required by its legislation, the PBO’s projections are based on the economic forecasts and other parameters underpinning the 2017–18 Budget. The PBO’s projections also assume that the Government’s policy settings remain unchanged from those current as at the 2017–18 Budget. Where government policy has not been made explicit beyond the forward estimates period, the PBO’s projections assume the continuation of the current policy settings.
The focus of the report is on detailed receipt and payment projections that explain movements in the underlying cash balance. The infrastructure spending projection does not capture infrastructure investment funded through equity injections into Australian government public non‑financial corporations such as the Australian Rail Track Corporation, or concessional loans such as the loan to the New South Wales Government for the WestConnex project. These investments are recognised as the acquisition of assets rather than payments, and only impact on the underlying cash balance through increasing public debt interest payments.