The federal government’s budget was an absolute disaster, with the loss of $2.4 billion in revenue and $3.3 billion in savings, according to the Auditor-General’s report.
“The budget deficit was $2 billion in 2019/20, compared to $6.7 billion in 2015/16 and $5.8 billion in 2010/11,” the report said.
“In contrast, gross debt was $3 billion lower in 2019 than in 2015.”
The Treasurer said the $1.9 billion surplus would “take us closer to the target” of reducing the debt-to-GDP ratio to below 40 per cent.
Treasurer Scott Morrison has said he is committed to spending $2bn on infrastructure and has promised to cut the GST.
In a statement, the Auditor General said the government “fiscal management is the key priority of the government” but also highlighted a number of other key policies which have “significantly impacted” the economy, including a “sustained increase in unemployment” and “low household debt levels”.
“These policies, together with the impact of the Coalition’s budget measures on economic growth and the Australian economy, have led to significant deficits,” the Auditor found.
A number of key policy areas, such as the Coalition government’s decision to axe the carbon tax and its cuts to welfare payments, were found to have had “significant impacts” on the budget deficit.
The Auditor-Gen found that the Government’s economic forecasts were “not accurate and have not been maintained”.
The Government had failed to meet its fiscal targets in 2017/18, the report found.
It recommended the government’s forecast for the future was “very conservative”.
But the Auditor also warned the government should not “overstate” its forecast.
It noted the “very low growth rate in the Australian labour market and the relatively low unemployment rate” made the budget “a challenging and challenging time for the Government”.
As the report’s authors highlighted, the Budget was the “most expensive Budget in Australian history” in 2019 and “a budget which has already seen the loss” of $7 billion.
Under the Budget, $1 billion was spent on “significant” “economic infrastructure” and $700 million was spent “to promote innovation”.
It said the Budget “succeeded by cutting spending on key government functions, such, childcare and education”.
Overall, the Government “did not have sufficient flexibility” to implement its budget and to “act quickly and effectively” in the face of the budget’s “challenges”, including the budget surplus.
While the budget was “a major disappointment”, it was “part of a longer term trend of a large-scale deterioration in economic performance” and a “worsening situation for the Australian people”, the Auditor said.