Coalition prepares to hand down record budget deficit

The federal deficit is likely to balloon out even further after the prime minister refused to rule out extending the coronavirus supplement past December, according to Sky News Political Editor Andrew Clennell.

Treasurer Josh Frydenberg announced Australia’s gross debt is forecast to hit $851.9 billion with this year’s budget deficit expected to reach $184.5 billion due to the novel coronavirus.

Mr Frydenberg said unemployment would peak at 9.25 per cent in December, although the real number will far exceed that number, with the virus wreaking havoc on large swathes of the economy.

The treasurer has delayed handing down the budget until October, with today’s announcement part of a fiscal update, outlining how the novel coronavirus has impacted the economy.

Prior to the COVID-19 crisis, the federal government had projected it would hand down a $5 billion surplus this year.

Mr Clennell said the government had discussed extending its JobKeeper program well into 2021 and has also flagged bringing forward income tax relief.

He said if the government commits to these stimulus measures, the budget deficit will exceed $184.5bn.

“Let’s face it, $184.5 billion, as unbelievable as this sounds, sounds optimistic, particularly when we have got this Victoria shutdown,” he said.

"The statement today featured all these aspects, including state borders opening, international borders slowly opening, which just is going to be happening.”

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From: Sky News Australia

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