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.