Governments needs to have a difficult conversation with the public about whether the level of spending used to combat the coronavirus pandemic is worth the eye-watering debt levels the Coalition is running up, according to former Reserve Bank official Andrew Stone.
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.
Prior the pandemic, the federal government had forecast it would hand down a $5 bn surplus in the 2019-2020 financial year.
The budget deficit is Australia’s biggest since World War II.
Dr Stone said the public need to know “the kind of trade-offs” they will have to make in order to keep up this level of spending.
“If we are running these sort of debt levels in the next 15 months, that’s going to mean billions and billion dollars less spent every year for decades going forward now on health, on the pharmaceutical benefits scheme, on education on all sorts of other government priorities," he said.
We need to have a very hard conversation now I think across the nation whether it is appropriate to spend these enormous sums of money.”
From: Sky News Australia