The Treasurer of Australia Jim Chalmers speaks in the House of Representatives in Canberra, Australia on Sept. 9, 2026. Hilary Wardhaugh/Getty Images
Australian Treasurer Jim Chalmers has delivered a $22.3 billion deficit in the 2025-26 financial year, $6 billion less than predicted in the May budget.
A budget deficit means the government spent more money than it received in revenue during the financial year.
The Treasury’s Final Budget Outcome released on Sept. 28 also found the Labor government collected $4.6 billion more in tax receipts than forecast, while costs to the government were $1.4 billion less than predicted.
The government said the upgrade in revenue was due to higher tax receipts from stronger super fund returns.
National Debt Over 30 Percent of GDP
The Labor government also revealed the nation’s gross debt was 33.2 percent of GDP in 2025-26, $10.6 billion lower than estimated at the budget.
Speaking to reporters, Treasurer Jim Chalmers said the deficit came out “$6 billion better than expected.”
“We have made a lot of progress in the budget and we have made more progress since then, but we know that there is more work to do,” he said.
“The bottom line is better than we inherited, better than it was at the election and better than it was forecast to be in May. It is now around half the deficit for the year just finished, compared to when we came to office.”
Chalmers also argued the improved result was not due to mining revenue.
“I want to be really clear that the improvement in receipts is not from commodities. In fact, mining profits came in lower than was anticipated,” he said.
“It’s also not from wage earners. It is overwhelmingly from higher super and investor income than what we anticipated in the Treasury’s forecasts in May … so those are some important points of perspective.”
The government said the deficit was 0.8 percent of gross domestic product (GDP), half the 1.6 percent forecast by the former Coalition government.
Meanwhile, Finance Minister Katy Gallagher earlier defended the government’s role in balancing the budget.
“We do everything we can to make sure that the budget is in as good a shape as it can, acknowledging that we are having to find room to invest in all these areas that the Australian people care about deeply and want to see improved services in,” she said on the ABC.
