Deloitte Access Economics Director Chris Richardson says the budget deficit to be announced today will be “eye-watering” but urged against viewing it as a “terrible thing” for the country.
Treasurer Josh Frydenberg will announce the nation’s budget deficit for the 19-20 fiscal year will top $90 billion and will double to $190 billion by next financial year.
“Lots of the reports today will be about how it’s a terrible thing, and sure it is, my take though is just remember this is the budget doing exactly what you want it to do in a crisis; protecting the pockets of families and businesses and keeping jobs going,” he said.
“If we weren’t running these enormous deficits, we would have less money today in the pockets of families and businesses.
“It’s unfortunate, but entirely necessary.”
Mr Richardson said he was “not really fussed” about how long it would take to pay back but said it would be silly to pay it back prematurely.
“I wouldn’t try to pay it off – the same we didn’t pay off the debts of World War Two – at a time when unemployment is high and the Reserve Bank is effectively doing everything it can do,” he said.
“If we tried hard to pay it off, that would be entirely counter-productive.
“The smart play is to get the economy right, and that will get the budget right.”
From: Sky News Australia