How budgets work

The federal Budget is the government's annual financial plan. It is handed down by the Treasurer on the second Tuesday of May.

The cycle

1. Departments submit bids for funding — August to December.
2. Expenditure Review Committee (senior ministers) decides what to fund — Jan–Mar.
3. Budget Night — Treasurer's speech to Parliament.
4. Appropriation Bills — Parliament must pass laws authorising the spending.
5. Financial year runs 1 July → 30 June.

Where the money comes from

• Personal income tax (~50%)
• Company tax (~20%)
• GST (~15%, passed to states)
• Excise (fuel, alcohol, tobacco), customs, and other levies

Where it goes

• Social services & welfare (~36%)
• Health (~17%)
• Defence (~9%)
• Education (~7%)
• Infrastructure & transport (~5%)
• Interest on debt (~6%)
• Everything else (~20%)

Deficit vs surplus: A deficit means the government spent more than it raised (and borrows to cover the gap). A surplus means it raised more than it spent.

Sources: budget.gov.au, Treasury Budget Paper No. 1.