I’m surprised Deputy PM and Treasurer Wayne Swan included this chart of budget balances in his economic note today, because it shows just how big (and implausible) the improvement in the Commonwealth Budget needs to be (i.e. around 2.6% of GDP) for the Government to record a surplus in 2012-13:

Looking at the historical Budget data in the Mid-Year Economic and Fiscal Outlook (Appendix D), the biggest improvement in the Budget balance between two financial years occurred between 1998-99 and 1999-2000, when the budget balance improved from 0.6% to 2.0% of GDP. This improvement was around 1.4% of GDP, compared with the required improvement in 2012-13 of 2.6%. Hence the historical record suggests the Government is very unlikely to achieve a surplus in 2012-13.