Prime Minister Scott Morrison says the Australian budget, to be delivered on 6 October, will be a “titanic effort” to return the country to economic growth hammered by the coronavirus chaos.
PM Morrison told reporters Sunday that the budget will the “most unprecedented investment in Australia’s future.”
Australia’s GDP shrank 7% in Q-2, the largest contraction since record-keeping began in Y 1959. That followed a 0.3% decline in Q-1, meaning Australia was in recession for the 1st time in 30 yrs.
Australia was the only major economy not to go into recession during the Y 2008 global financial crisis, its strength supported by strong demand, especially from China, for its natural resources: coal, nat gas and iron ore.
Before the coronavirus attack the economy was affected by massive bushfires in January that hit small businesses, which depend on tourism.
Business shutdowns forced by the China virus cost nearly 1-M jobs and resulted in a major reduction in household spending despite PM Morrison’s government providing almost US$140.5-B in economic stimulus.
PM Morrison said the upcoming budget “will be a ‘titanic effort’ that we are involved in to ensure that this country can get back on the growth path that we want to be on. That means we’re going to have to do some very heavy lifting in this budget and that comes at a significant cost.”
Treasurer Josh Frydenbeg, who will deliver the budget speech, Thursday provided a downbeat economic outlook. Mr. Frydenberg said the economy likely will be 6% smaller by mid-2021 than forecast at the end of Y 2019.
He said the government’s focus will be on economic recovery rather than budget repair until unemployment is “comfortably” less than 6%.
“Australia’s future population will be smaller and older than we previously assumed because of the sharp drop we are seeing in net overseas migration,” Mr. Frydenberg said. “While migration will eventually return to the levels we are accustomed to, lost migrants will not be replaced.”
Have a healthy weekend, Keep the Faith!