Australia posts budget deficit of $15.7 billion for 2025/26 financial year

SYDNEY, Sept 28 (Reuters) - Australia ‌reported a ​final ​budget deficit of A$22.3 billion ($15.65 billion) for the year to June 2026, better than previously expected, ‌as lower spending and stronger tax receipts boosted ⁠the government's bottom line, Treasury said on Monday.

• Figures from the Final ‌Budget Outcome 2025/26 showed ‌a deficit of about 0.8% of gross domestic product but smaller than a deficit of A$28.3 billion forecast earlier ​this year, Treasury said.

• That compared with an A$10 billion deficit for the 2024/25 financial year that ⁠ended two years of surpluses.

• The budget position improved due to lower payments across ​a range of welfare programmes and better-than-expected tax receipts from businesses and investment income earned ​by pension funds, Treasury said.

• "Despite this ‌very welcome improvement in the budget, we know that pressures are intensifying rather than easing," ⁠said Treasurer Jim Chalmers at a press conference.

• The government earlier in the year forecast the budget deficit would widen to ⁠A$31.5 billion in the 2026/27 financial year, but the fiscal backdrop has ​darkened since then, with a global bond rout driving yields sharply higher and raising the borrowing costs for all governments.

• The Reserve ‌Bank of Australia is widely expected to raise interest rates for a fourth time to ‌4.6% on Tuesday to tame sticky inflation and slow down ⁠demand. The labour market ‌has, meanwhile, stayed resilient, ​with the unemployment rate hovering at 4.6%.

($1 = 1.4245 Australian dollars)

(Reporting by Stella Qiu; Editing by Muralikumar ‌Anantharaman)

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