Mitigating Coronavirus Pandemic Will Cost Australia $131 Billion in 2020

CANBERRA, KOMPAS.com - Responding to the coronavirus pandemic has cost the Australian government $61 billion in debt in the last fiscal year.

The government expects another $131 billion in debt will add a dent in the national budget in the current year.

This would be Australia’s biggest deficit since World War II, based on treasury figures presented on July 23.

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Treasurer Josh Frydenberg revealed the country’s weak economic outlook based on increased government spending to stimulate the economy and declining tax revenue.

The red-zone outlook is a stark contrast to the conservative government’s forecast in December 2019 in which Australia would have had a $3.6 billion surplus in the fiscal year that ended June 30, 2020.

Had the forecast come to fruition, it would have made it the country’s first surplus in 12 years.

"Coronavirus has had a significant impact on the budget bottom line,” Frydenberg said.

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“There is significant uncertainty which means that it would not be possible at this point to make credible forecasts and projections beyond what we present to you today,” he added.

Australia has been in a recession throughout calendar 2020, partly due to drought and wildfires that preceded the pandemic.

The government has spent AU$289 billion ($206 billion) in pandemic relief measures to save jobs and businesses.

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The economy is forecast to grow by 1.5 percent in the September quarter and 2.5 percent next year.

The forecasts are based on some optimistic assumptions including that a lockdown in the city of Melbourne will be lifted after six weeks and that international borders will reopen in January.

The government had been scheduled to release in May its economic plans for the current fiscal year which started on July 1.

But because of the economic turmoil, the release of that plan was delayed until Oct. 6.

(Writer: Rod McGuirk) 

Source: https://apnews.com/e5b1d4dc1db4c8b8230e8ba8192ae8e4