Australia Posts A$22.3 Billion Deficit for 2025/26, Beats Forecast on Stronger Tax Receipts

Australia recorded a final budget deficit of A$22.3 billion ($15.65 billion) for the fiscal year ended June 2026, Treasury said on September 28, 2026 — narrower than the A$28.3 billion shortfall forecast earlier this year. The deficit equals about 0.8% of GDP. Lower spending across welfare programs and stronger-than-expected business and pension fund tax receipts drove the improvement. The result follows an A$10 billion deficit in 2024/25, which ended two years of surpluses. "The pressures are intensifying rather than easing," Treasurer Jim Chalmers said, noting a global bond rout has pushed yields sharply higher and raised government borrowing costs. Canberra had projected the 2026/27 deficit would widen to A$31.5 billion. The Reserve Bank of Australia is widely expected to raise interest rates for a fourth time to 4.6% on September 29 to curb sticky inflation, with unemployment holding at 4.6%.