Budget 20-21 spend, spend, spend as the focus remains on recovery and jobs, jobs, jobs

 

Shane Oliver, Head of Investment Strategy and Chief Economist

The attached note reviews the Australian 2020-21 Federal Budget.

The key points are as follows:

  • The Government now expects the Federal budget deficit to peak at a record $213.7bn this financial year. That’s around 11% of GDP, its highest since the end of WW2. The risk is the deficit will be worse at around $230bn.
  • Key measures include earlier tax cuts, massive tax breaks for investment & a new wage subsidy scheme.

Providing more stimulus & holding off on budget repair are the right thing to do. But it will be a long hard slog to get the deficit back down and stabilise public debt.

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