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Budget confirms road to recovery
The Australian economy continues to recover from the COVID-19 pandemic, with the budget showing an improvement in labour productivity and economic output.
Budget confirms road to recovery
The Australian economy continues to recover from the COVID-19 pandemic, with the budget showing an improvement in labour productivity and economic output.
Treasurer Josh Frydenberg used his budget speech to show Australia is now above pre-pandemic levels and its recovery is ahead of major world advanced economies.
A buoyed Treasurer noted a win on the health front has meant Australia has not only avoided the worst case scenarios, but is in front of previous predictions.
“Australia’s fate could have been so much worse,” Mr Frydenberg said in relation to Australia’s GDP figures.
“The United Kingdom, France and Italy all contracted by more than 8 per cent; Japan and Canada by around 5 per cent.
“Australia, just 2.5 per cent.”
Mr Frydenberg noted that stronger GDP figures are leading to better result on the employment front, with the number of Aussies employed reaching a record high 13.1 million.
“At 5.6 per cent, unemployment today is lower than when we came to government,” he said.
“This is remarkable.”
However, Mr Frydenberg said Australia’s strong economic position has come at a cost, with national debt ballooning.
“The COVID-19 recession will see our deficit reach $161 billion this year, falling to $57 billion in 2024‑25,” he explained.
The Treasurer put a positive spin on it, saying Australia’s debt remains low by international standards.
“With more Australians back at work, this year’s deficit is $52.7 billion lower than was expected just over six months ago in last year’s budget.”
“Net debt will increase to $617.5 billion or 30.0 per cent of GDP this year and peak at $980.6 billion or 40.9 per cent of GDP in June 2025,” Mr Frydenberg explained.
More marketing and missed opportunities
Australia’s recovery has failed to impress shadow treasurer Jim Chalmers, who labelled the budget a shameless political fix rather than the genuine reform needed to make Australia’s economy stronger, broader and more sustainable.
“Despite spending almost $100 billion and racking up a record $1 trillion in debt, the Morrison government’s budget reveals real wages will go backwards,” Mr Chalmers said.
“Beyond the hype and the headlines, Australians on modest incomes will only receive a temporary tax break before the election and be dealt a tax hike after it, while the highest income earners will enjoy a permanent tax cut forever.”
He also opined that the budget’s success does not hinge on the headline-seeking announcements, but on the government delivering on them.
“For eight long years, this government has overseen record–low wages growth, chronically high underemployment, and it still doesn’t have a credible plan to create secure jobs,” Mr Chalmers said.
“For eight long years, this government has presided over an aged-care crisis, an energy crisis, a housing crisis and a skills crisis.”
“And for eight long years, this government has overpromised and underdelivered on critical infrastructure and this budget actually cuts funding by $3.3 billion.”
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