NO.062

An underlying cash surplus for the general government sector of $4.2 billion has

been achieved for 1998-99. This is the second of the surpluses to be delivered by this

Government (the 1997-98 Final Budget Outcome number was $1.3bn).

When the Government came into office in 1996 the underlying cash budget deficit left by

the former Labor Government was $10.1 billion. Over three years, this deficit has been

fully reversed and turned into a solid surplus. This surplus has been achieved through

responsible budget management centred on outlays restraint.

By ensuring outlays are appropriately targeted, the Government has delivered strong

fiscal outcomes while maintaining funding to high priority areas such as education,

health, employment, defence, rural and regional Australia, the aged and families.

The 1998-99 budget outcome fulfils the Government’s commitment to maintain

the Budget in surplus while Australia’s growth prospects remain sound.

The fiscal consolidation undertaken since the Government came into office has been a

key ingredient in the Australian economy’s continued resilience in the face of

difficult economic conditions throughout the East Asian region.

The Government’s fiscal consolidation has also substantially reduced the level of

Commonwealth general government net debt. The surpluses that are in prospect, together

with the expected proceeds from Commonwealth asset sales, will make possible further

substantial reductions in net debt.

The budget outcome for 1998-99 compares with an estimate of $2.9 billion at the

time of the 1999-2000 Budget.

From next year the FBO will be replaced by Consolidated Financial Statements, prepared

on an accrual basis (and including cash flow information).

The budget forward estimates will be updated in the 1999-2000 Mid-Year Economic and

Fiscal Outlook, which is this year expected to be released in November.

CANBERRA

23 September 1999