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SENATOR KATY GALLAGHER
SHADOW MINISTER FOR FINANCE
SHADOW MINISTER FOR THE PUBLIC SERVICE
CHAIR OF THE SENATE SELECT COMMITTEE ON COVID-19
SENATOR FOR THE AUSTRALIAN CAPITAL TERRITORY
The independent Parliamentary Budget Office (PBO) has today released a sobering assessment of the impact that COVID-19 will have on the nation’s budget over the next ten years with a budget deficit of around $200 billion in 2020-21, building on a budget deficit of just under $70 billion in this financial year.
The PBO has provided this important fiscal projection update to the public at a time when the Government has again delayed the Budget update, keeping people in the dark and trying to avoid scrutiny.
The Medium-term fiscal projection scenarios: impact of COVID-19 pandemic and response report finds that there will be a “sustained fiscal impact” over the next decade, with deficits forecast for the next 10 years, net debt to be $500 billion to $620 billion higher over the same time period and economic activity unlikely to return to pre-COVID-19 levels until 2026-27.
Even before the fires and virus outbreak the budget was under pressure from longstanding weakness in the economy.
Annual growth was below trend, consumption was weak, business investment had fallen, underemployment and household debt hit record highs, wages growth hit record lows and debt had more than doubled.
Now the Australian economy is in recession for the first time in 29 years.
Despite having almost seven years in office, the Liberals have not done enough to safeguard our economy from external shocks or make our economy strong, inclusive or sustainable enough and this has had a direct impact on the strength of the budget.
The take-out message for the Prime Minister and Treasurer from this report is just how important it is to get the economic recovery from COVID-19 right.
Australians cannot afford to have a Government that is big on slogans but short on a comprehensive plan to grow the economy, to keep people in jobs and to look after those that need an extra hand throughout the recovery stage.
For the past seven years this Government has measured economic success through the lens of budget surpluses and low debt and yet on both these measures they have failed.
The Liberals have been responsible for six budget deficits and the more than doubling of government debt.
They promised a budget surplus before they had delivered one and led Australia into this crisis in a position of weakness not strength.
Australians desperately need an effective, well-executed response to this crisis, and a plan that bolsters the recovery and sets Australia up for the future.
FRIDAY, 5 JUNE 2020