Coalition

Budget impacts over the medium term

The estimated impact of the Coalition's platform would decrease the underlying cash, headline cash and fiscal balances over the medium term (Figure 4‑1).

Figure 4-1: Medium-term impact of the Coalition's platform on the budget balance aggregates

While the underlying cash balance is estimated to improve relative to the baseline from 2027-28 to 2030-31 (Figure 4-2), there is expected to be an escalating decline over the remainder of the medium term as the impacts of large ongoing commitments such as Tax on unrealised capital gains – do not proceed (ECR-2025-2011) and Increase defence spending – including investing in a fourth F-35A Lightning Squadron (ECR-2025-2734) grow. The impact of unspecified tax cuts required to meet the Coalition's tax cap of 23.9% of GDP also contribute to the decrease.

These impacts are estimated to result in underlying cash deficits of $462.6 billion in total over the medium term (Table 4‑5).

Figure 4-2: Medium-term impact of the Coalition's platform on the underlying cash balance

Figure 4-3 shows the impact of the Coalition's policies on receipts in each year and whether these are tax or non-tax receipts, as well as the impact of the tax cap.

If fully implemented, the Coalition's platform would result in less tax receipts in the early years of the forward estimates and over the medium term relative to PEFO. The medium-term impact is primarily due to the Coalition's policy to maintain tax receipts at or below a cap of 23.9% of GDP. Without the tax cap, the Coalition's platform would have led to a modest increase in tax receipts.

Figure 4-3: Impact of the Coalition's platform on receipts, by major receipt type
Underlying cash balance

Under the Coalition's platform, payments (Figure 4-4) would be higher over the medium term relative to PEFO. The additional spending is mainly on the defence commitment Increase defence spending – including investing in a fourth F-35A Lightning Squadron (ECR-2025-2734).

The additional spending would be partly funded by commitments to achieve savings, mainly from general public services, such as the commitment Reducing the APS to a sustainable level over time through natural attrition (ECR-2025-2147) and economic affairs, such as the commitment Green Hydrogen Production Tax Incentives – reverse (ECR-2025-2013).

Figure 4-4: Impact of the Coalition's platform on payments according to purpose
Underlying cash balance, average annual impact 2025-26 to 2035-36

While the Coalition's election commitments are estimated to result in lower government gross debt across most of the medium term relative to PEFO, they are expected to result in $147.3 billion higher gross debt by the end of the medium term (Figure 4-5), reaching $1.7 trillion or 35.1% of GDP (Table 4‑7).

The increase in gross debt is driven by the escalating decline of the underlying cash balance from 2031-32. Public debt interest payments are expected to be $21.6 billion lower over the medium-term period.

Figure 4-5: Medium-term impact of the Coalition's platform on government debt

The Coalition's platform has a larger impact on net debt than gross debt as a result of commitments which reduce the government's exposure to concessional loans, such as National Reconstruction Fund and National Reconstruction Fund Corporation – unwind and close (ECR-2025-2247) and Cease undersubscribed COVID-era securitisation measures (ECR-2025-2065), which reduce gross debt but not net debt. 

Figure 4-6 summarises the Coalition's 10 largest election commitments over the medium term. The full list of medium-term impacts for each commitment is provided in Appendix B.

Figure 4-6: The Coalition's 10 largest election commitments over the medium term
Cumulative impact on the underlying cash, fiscal and headline cash balances