Acting to ensure the government lives within its means by keeping spending and taxes under control is enabling the Turnbull Government to build a stronger budget that underpins economic growth and guarantees the essential services Australians rely on like health and education.
Our plan for a stronger economy is returning the budget back to balance, ensuring taxpayers' money is spent responsibly and preventing taxes from damaging economic growth.
The Government's responsible budget management has lowered the underlying cash deficit to an expected $18.2 billion for 2017-18. This is expected to be the best budget outcome since the Howard Government's last budget a decade ago. This further reduces to $14.5 billion in 2018-19 and to a balance of $2.2 billion in 2019-20. A surplus of $11 billion is projected in 2020-21 and surpluses are projected to continue, building to over 1 per cent of GDP in the medium term.
Our plan ensures we can also act to provide tax relief to encourage and reward working Australians, starting with low and middle income earners; continue to back businesses to invest and create jobs; invest in productive infrastructure and keep Australians safe.
Ensuring the government is living within its means also enables us to tackle debt, creating a buffer to withstand any future economic shocks that could impact on Australians' livelihoods. Net debt has peaked as a percentage of GDP this year.
We are also keeping a tight rein on spending taxpayers' money. We have restricted growth in payments to the lowest level of any government in 50 years and we have reached the point where we are no longer having to borrow to pay for everyday government expenses. The essential services Australians rely on are being funded sustainably, not through debt.
We are setting a tax 'speed limit' so that our economy is protected from the damaging economic effects of ever higher and higher taxation. Our policy of ensuring tax does not exceed 23.9 per cent of GDP makes our economy stronger and helps to create more jobs for Australians.
At the same time, we are taking action to protect the sustainability of our tax and welfare systems.
Our targeted compliance actions continue to ensure the welfare system helps those who need it most. New powers will also be sought to back in States and Territories to crack down on offenders and criminals with outstanding warrants and fines by withholding their welfare payments.
Our crack downs on multinationals have already brought around $7 billion a year in sales revenue into our tax net and we are doing more.
We are further tightening thin cap rules to stop multinationals from fiddling with how they account for debt, to reduce their tax liabilities.
The Government will also soon release a discussion paper that will explore options for taxing digital business in Australia.
We are tackling the Black Economy and cracking down on tax evasion and illegal behaviours, which is expected to bring in $5.3 billion over the next four years.
We are also cracking down on R&D tax claims that push the boundaries of the R&D Tax Incentive, with enhanced integrity, enforcement and transparency arrangements.
Sticking with our plan will protect taxpayers, grow our economy, protect essential services and create new opportunities for all Australians.