How are we funding the higher allowances?
The Government's Budget allowances over the next four years and 100-Day Plan spending are about $24 billion higher than planned by the previous government for the years 2018/19 to 2021/22. This represents a 5.0 per cent increase in total core Crown expenses and a 31.0 per cent increase in total core Crown capital investment over the years 2018/19 to 2021/22.
Additional Budget allowances and 100-Day Plan spending *
Source: The Treasury
* The funding sources have been averaged across a four year period and are cumulative.
Additional new operating and capital spending of $24 billion is funded by:
Adopting a responsible debt reduction track
Fiscal space created by a core Crown net debt target of 20.0 per cent of GDP five years from taking office, which is only two years later than the previous government. This enables much-needed investments in housing, health, education and infrastructure. This spending track sees core Crown net debt reach 19.1 per cent of GDP in 2021/22.
Reversing National's tax cuts
Reversal of the previous Government's poorly-targeted tax cuts. This will fund the Families Package and other 100-Day Plan commitments.
Revenue from a growing economy
Higher tax revenue driven by higher-than-expected economic growth than forecast at the Pre-Election Economic and Fiscal Update.
Reprioritisation and revenue from a fairer tax system
Revenue from changes to make our tax system fairer and from the Government's initial reprioritisations.