However, opposition voices, including Liberal Senator Jane Hume, criticized the government’s portrayal of the deficit reduction, suggesting it is partly due to 'bracket creep' and high commodity prices, implying some fiscal mismanagement.

This marks the first budget deficit since the Albanese Government returned to power, and the deficit is notably lower, reflecting a more optimistic fiscal outlook.

The government claims this improvement demonstrates a robust fiscal position, with progress surpassing all previous governments in just three years and positioning Australia’s budget among the strongest in the G20.

Looking ahead, the final budget outcome projects an average real spending increase of 1.7 percent over the next seven years, through 2028/29.

This budget announcement comes at a time when the Reserve Bank is deliberating potential interest rate cuts, signaling a period of active economic policymaking.

Minister Gallagher emphasized that increased revenue was driven by more Australians securing jobs and earning higher wages, supported by measures such as cost-of-living relief, tax cuts, cheaper childcare, energy bill relief, and record investments in Medicare.

Treasurer Jim Chalmers and Finance Minister Katy Gallagher highlighted that the smaller budget deficit of $10 billion, announced today, is largely due to a stronger jobs market and rising wages, making it significantly better than the nearly $30 billion forecasted before the May election.