Under Section 64E of the Parliamentary Service Act 1999 (the Act) the Parliamentary Budget Officer is required to conduct, on his or her own initiative, research on and analysis of the budget and fiscal policy settings.

The initial work plan of the Parliamentary Budget Office (PBO) published in October 2012 indicated that as part of its self-initiated work program, the PBO would seek to throw more light on the underlying structure of the budget and the factors that could affect the sustainability of the budget over the medium to longer term.

This report focusses on movements in the estimated structural budget balance over the past decade and through the 2013-14 budget and forward estimates years. Future reports will examine trends in the key drivers of the budget and their implications for the sustainability of the government’s fiscal position over the medium term.

This report is the first in a series of reports that the PBO proposes to issue to help explain how underlying budgetary trends and discretionary fiscal policy decisions impact on the government’s fiscal position.