Operating and capital allowances
Our better than forecast economic performance means we can continue investing to respond to COVID-19 and secure the recovery. The operating allowance at Budget 2021 has been allocated at $3.8 billion, the same as was allocated in the 2019 Wellbeing Budget.
The 2021 operating allowance and allowances across the forecast period have been increased from what was signalled in the Budget Policy Statement2021 (BPS) because of the improved economic outlook and stronger fiscal position. The four-year capital allowance has also been increased to allow for greater infrastructure and capital investment over the forecast period to support the economy.
Although allowances have been increased in the Budget this year and for future Budgets, both net debt and OBEGAL are better than forecast in the BPS by the end of the forecast period. The fiscal strategy signals new operating spending of $2.7 billion per annum in future Budgets in the forecast period as the need for ongoing fiscal stimulus reduces over time. However, the global COVID-19 situation means we will continue to face an environment of significant uncertainty. The strong economic and fiscal position means the Government is able to respond to future shocks if required, and allowances will be kept under active review, allowing us to move quickly if the global COVID-19 situation changes.
Table 6 - Budget Allowances
|$billions||Budget 2021||Budget 2022||Budget 2023||Budget 2024|
|Operating allowances at 2021 Budget Policy Statement (per year)||2.625||2.625||2.625||2.625|
|Operating allowances at Budget 2021 (per year)||3.8||2.7||2.7||2.7|
|Multi-year capital allowance at 2021 Budget Policy Statement||← 7.8 →|
|Multi-year capital allowance at Budget 2021||3.9||← 8.1 →|
Source: The Treasury