IMF Staff Country Reports

Australia: Selected Issues

Publication Date:

February 21, 2019

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

This Selected Issues paper evaluates Australia’s experience with its principles-based fiscal framework. A key contribution of the paper is an evaluation of whether the medium-term budget balance anchor remains suitable in the post-Global Financial Crisis (GFC) economic environment. This paper analyzes the medium-term fiscal strategy (MTFS) in the context of the principles underlying the fiscal framework and offers suggestions for reinforcement. Comparing the alternative and current fiscal policy toolkits under a downside scenario demonstrates possible improvements to fiscal outcomes. The evaluation outlines that the operational principles of the MTFS have been consistent with the broad principles for sound fiscal policy laid out in the Charter, although implementation has involved difficult trade-offs. Options to deal with the treatment of debt, its accountability framework and its fiscal policy toolkit should help strengthen the statement and implementation of Australia’s fiscal strategy and reinforce its fiscal framework in the current and prospective economic environment.

Series:

Country Report No. 2019/056

Subject:

Budget planning and preparation Business cycles Economic growth Fiscal governance Fiscal policy Personal income tax Public financial management (PFM) Taxes