Fiscal Policy

Reasons for Actual Budget Outcomes

Topic Menu
Content Contributors
Christian Bien Portrait_edited.jpg

Christian Bien

Learning Objectives

tutorial.png

one.png
Slide1.jpeg

In most cases, actual budget outcomes are not the same as budget estimates. This can be contributed to a range of factors such as:

two.png
Political Factors
Slide2.jpeg
  • Budget measures do not pass through both houses of government or are modified - for example, the 2016/17 budget included estimated revenues from a 32.5% backpacker tax which was compromised to only 15% from political pressure 

  • New policies are introduced and passed in both houses in government to which the budget has not been considered.

two.png
Economic Factors
Slide2.jpeg
  • Economic estimates were wrong - budget estimates are based off predictions in future economic indicators. Actual economic indicators are often different from budget estimates, leading to changes in revenue and expenditure.

two.png
External Factors
Slide2.jpeg
  • Unforeseen event - a natural disaster may require the government to contribute government spending to assist in affect areas. This expenditure is unplanned and not included in government budget estimates. 

  • Changes in the exchange rate 

  • Changes in terms of trade 

two.png
Slide2.jpeg
two.png
Slide2.jpeg
two.png
Slide2.jpeg
two.png
Slide2.jpeg