With Australia’s 2013-14 budget only a day away, I figured it’s time to have a look at Australia relative to some comparable peers (note IMF data is made to be comparable across nations and so will not match up exactly with Australian Government data).
First off, let’s look at revenues (which Swan tells us have been ‘smashed with a sledgehammer’). Australian Governments collected ~33.6% of GDP in calendar year 2012. The US was lower, on 31.8%, and Switzerland collected 33%; the G20-advanced average was 35.5%. Note that the Euro area is the leader of the pack – despite the fact that revenue as a share of GDP typically drops when the economy is weak.
On the expenditure side, Australian Governments spent 36.6% of GDP in 2012. Only Switzerland was lower, at 32.7% of GDP. The G20-advanced average was 42.1%.
The Euro area is also top of the charts on spending, at ~50% of GDP — even after all the ‘austerity’ these remain high-taxing and high-spending governments. Perhaps their growth problem has something to do with the fact that the reward for work is diminished by high rates of tax, and that the 50% of GDP directed by the government is not well spent.
Spending more than you collect means you have a deficit, and so it was that Australian Governments ran an overall balance of -2.9% of GDP. This is the smallest of the deficits in the chart I included, but it’s a long way off the surplus in Germany (+0.2% of GDP) and Switzerland (+0.3% of GDP).
After adjusting for interest payments, the IMF calculates that Australia’s primary deficit was -2.5% of GDP. On this measure the Euro Area looks pretty good (but rates are high because they are a bad credit, so it’s also a junk stat). Here, Germany is the clear winner at +2.4% of GDP; Switzerland is in second place at 0.7% of GDP.