Budgets outlooks across Australia may have deteriorated and government debt increased, but a new analysis says the nation's overall position still compares favourably with other economies.
The independent Parliamentary Budget Office says levels of spending and revenues across federal and state governments are around the OECD average and debt is still relatively low.
"Ongoing risks to revenue and expense projections at both Commonwealth and state levels, however, suggest a need for continued vigilance," it warns.
The national fiscal outlook deteriorated by $13.4 billion for the period 2016/17 to 2019/20 compared to a forecast a year ago, while net debt was $22.9 billion worse across Commonwealth and state budgets.
Even so, over the next four years, the national net operating balance - budget balances minus net capital investments - is expected to improve from a deficit of 1.4 per cent of GDP to a surplus of 1.6 per cent of GDP.
"This improvement relies on a pick-up in Commonwealth personal income tax revenue largely driven by higher wages growth," the PBO says.
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