The fiscal balance is an accrual measure that shows whether the Government has to borrow from financial markets to covers its activities.
The purpose of this measure is to meet the central fiscal objective to ensure that the Government, over the economic cycle, is saving enough to cover its own investment needs and not drawing on private sector savings.
It is calculated as revenue net of expenses from operations, plus revaluation adjustments (to remove items that do not impact on the fiscal balance), plus net capital investment (net investment in non-financial assets) as such investment is integral to the operation of Government. A deficit for example, indicates that the Australian Government is drawing on resources of other sectors in the economy. The fiscal balance is thus an accrual indicator of the financial impact of the Australian Governmentâs operations on the rest of the economy.
A link to a diagram outlining the calculation of the underlying cash balance is provided below.
- Diagram of the calculation of the fiscal balance PDF version [ 160 KB]
- Diagram of the calculation of the fiscal balance RTF version [ 105 KB]