Government Financial Progress: 2024/25 Statements Reflect Fiscal Discipline and Investment Boost

Today’s government financial statements for 2024/25 are the first to fully reflect decisions made by the current Government and show the progress being made in getting the country’s books back in order, Finance Minister Nicola Willis says.

These are actual numbers, not forecasts. They show that: as a share of GDP, core Crown expenses fell from 33.1 per cent in 2023/24 to 32.5 per cent in 2024/25 net core Crown debt remained steady at 41.8 per cent of GDP, after rising every year for the previous five years the headline operating balance measure, OBEGALx, remained steady at a deficit of 2.1% of GDP, coming in $900 million better than was forecast at the time of the Budget.

This progress reflects the Government’s ongoing work to restore fiscal discipline with cumulative savings of around $44 billion being delivered over the Government’s first two Budgets.

These savings enabled the Government to increase investment in health, education, police and defence at the same time as delivering tax relief and establishing Investment Boost.

Fiscal discipline will continue with Budget forecasts showing government spending dropping to 30.9 per cent of GDP by 2028/29, Nicola Willis says.

The Government has resisted calls for sharper reductions in expenditure because international evidence is that reducing deficits is best done over the course of several years.

In dollar terms Crown spending increased $2.7 billion in the just completed financial year. This compares with an increase of $11.4 billion the previous year.

The increased expenditure in 2024/25 was driven by a $2.9 billion increase in superannuation and welfare costs that was partially offset by declines in other areas.

The Government’s priorities for next year’s Budget will be set out in the Budget Policy Statement on 16 December. It will be released at the same time as the Treasury’s Half Year Economic and Fiscal Update.