The Budget is not the last fiscal update of the year

Economic conditions, tax receipts, commodity prices and government decisions change after the annual Budget. The Commonwealth therefore publishes further fiscal updates so Parliament and the public can see how forecasts and policy costs have evolved.

Two important documents are the Mid-Year Economic and Fiscal Outlook, commonly called MYEFO, and the Pre-election Economic and Fiscal Outlook, known as PEFO.

MYEFO

MYEFO is a government fiscal update prepared during the financial year. It refreshes economic forecasts, revenue estimates, expenses and the expected Budget balance and includes the fiscal impact of policy decisions taken since the Budget.

Comparing MYEFO with the Budget can show whether the fiscal position changed because of new policy, economic parameter changes or both.

PEFO

PEFO is released after an election is called and is designed to provide an updated statement of the government's fiscal position during the campaign. It is prepared by the Secretaries of Treasury and Finance under the Charter of Budget Honesty framework.

That institutional arrangement is intended to provide an authoritative baseline during an election period, separate from campaign claims made by parties.

Forecasts are not outcomes

Budget, MYEFO and PEFO figures include forecasts for future years. Forecasts rely on assumptions about economic growth, wages, inflation, employment, commodity prices and program spending.

Later outcomes can differ significantly. A political claim should therefore identify whether a number is an actual result or a forecast at the time the document was published.

How to compare fiscal documents

Use the same financial year and the same fiscal balance measure, then separate policy decisions from parameter and economic variations where the documents provide that breakdown. This avoids attributing every improvement or deterioration to a new government decision.

For election-costing debates, PEFO often becomes the common fiscal baseline against which campaign proposals are assessed.

Primary sources and further reading

We use authoritative Australian institutions as the starting point for this explainer. Follow these links for the underlying rules, official guidance and current details.