Australia plans big spending COVID-19 pandemic measures, record debt
Australia's economy has been hit hard by the coronavirus pandemic, and universities are also set to lose billions AFP/Saeed KHAN
CANBERRA: The Australian government on Tuesday (Oct 6) will reveal a big spending financial blueprint for the next few years that will drive business investment and job creation while repairing pandemic damage to the economy, the treasurer said.
The government is also expected to accrue record debt in the current fiscal year that ends on Jun 30, 2021, Treasurer Josh Frydenberg told reporters.
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“I will lay out our economic recovery plan to rebuild the Australian economy and secure Australia’s future,” he told reporters.
Budget plans usually delivered in May were delayed this year due to the economic uncertainty created by the COVID-19 pandemic. The forecasts assume a COVID-19 vaccine will become available next calendar year.
“Our plan will create jobs. Our plan will create opportunity. Our plan will drive investment. Our plan will grow the economy and guarantee the essential services Australians rely on,” Frydenberg said.
The annual budget is expected to contain a wage subsidy to get unemployed young Australians back to work. The government also hopes to bring forward planned income tax cuts.
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“It rewards effort, encourages the power of aspiration, but it also encourages and leads to greater economic activity as people with tax relief spend more,” Frydenberg said.
The government has already announced road and rail infrastructure projects worth AUD$7.5 billion (US$5.4 billion) will be brought forward to energise the economy.
The budget measures would focus on driving Australia’s unemployment rate below 6 per cent faster than in the aftermaths of previous recessions, Frydenberg said.
The latest jobless figures are for August when the rate was 6.8 per cent. The rate would be far higher if the government was not paying employers a subsidy to keep staff in work.
Before the pandemic, the conservative government had expected to record Australia’s first budget surplus in 12 years in the fiscal year that ended on Jun 30 this year. Instead, Australia has sunk into its first recession in 28 years with spiraling debt.
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