Explainer: A snapshot of the mid-year budget update

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Treasurer Scott Morrison has handed down the mid-year budget review. Here's what you need to know:

Treasurer Scott Morrison insists the Turnbull government has the federal budget on the right track while setting out parameters for a May announcement about personal tax cuts.

Handing down the mid-year budget review on Monday, Mr Morrison is sticking to his promise of a budget surplus by mid-2021 and expects it will be almost $3 billion larger at $10.2 billion than previously forecast.

And for this financial year, Mr Morrison is forecasting a smaller deficit of $23.6 billion compared to the previous estimate of $29.4 billion.

Here's a break down of what you need to know:

Key spending since the May Budget

  • $2.1 billion for new and changed listings on the Pharmaceutical Benefits Scheme, including for chronic lymphocytic leukaemia.
  • An extra $1.3 billion for the new schools funding package over four years.
  • Pushing ahead with an alternative university package, including freeze on total Commonwealth Grant Scheme funding from January 1, 2018. The reforms will cost $605 million over four years (but are a saving on the previously proposed package).
  • $118 million for the Office of National Intelligence.

Key savings since the May Budget 

  • Broadening the waiting period criteria for new migrants before they can access some welfare benefits - saving $1.2 billion over four years.
  • A new minimum HELP loan repayment threshold of $45,000 from July 1, 2018.
  • Greater family day care compliance measures - saving $1 billion over four years.
  • Changes to after-hours doctor visits - part of a broader package saving $409 million (which will be directly reinvested into Medicare).
  • Ceasing the School Enrolment and Attendance Measure - saving $29.6 million over four years.
  • Using Family Tax Benefit lump-sum, reconciliation or instalment arrears payments to repay outstanding social security, student assistance and parental leave debts from December 2018 - saving $176.6 million.

Budget forcasts 

  • 2017/18 deficit $23.6 billion vs $29.4 billion at time of May budget
  • 2018/19 deficit $20.5 billion vs $21.4 billion
  • A surplus is still projected in 2020/21

Economic growth 

  • 2017/18 2.5 per cent vs 2.75 per cent
  • 2018/19 3.0 per cent vs 3.0 per cent

Unemployment rate

  • 2017/18 5.5 per cent vs 5.75 per cent
  • 2018/19 5.25 per cent vs 5.5 per cent

Wage growth

  • 2017/18 2.25 per cent vs 2.5 per cent
  • 2018/19 2.75 per cent vs 3.0 per cent

CPI

  • 2017/18 2.0 per cent vs 2.0 per cent
  • 2018/19 2.25 per cent vs 2.25 per cent

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Labor MP Chris Bowen responds to the mid-year budget update
Labor MP Chris Bowen responds to the mid-year budget update

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