Yahoo Finance $197.7 billion deficit: What the 2020 Budget update means for you
The national deficit has shrunk by $24 billion to $197.7 billion, Federal Treasurer Josh Frydenberg has announced in its 2020 mid-year economic and financial outlook.
The mid-year economic and financial outlook (MYEFO), which is an update to the 2020 Federal Budget that was handed down only two months ago, reveals that the deficit – originally expected to be $221 billion – would now represent 9.9 per cent of GDP.
“Today's budget update confirms that the Australian economy is rebounding strongly,” Frydenberg said on Thursday.
“Following the biggest economic shocks since the Great Depression, Australians are back spending and they are back working, and they are back moving freely across the nation.”
GDP growth is now forecast to grow by 4.5 per cent 2021 after a GDP slide of 2.5 per cent this year.
Unemployment is forecast to peak at 7.5 per cent in the March quarter next year, revised down from 8 per cent forecast in the 2020 Budget.
But it will take four years for the unemployment rate to get back to pre-Covid levels, Frydenberg said. Unemployment figures for November, released today, fell to 6.8 per cent. The figure is slated to drop to 6.25 per cent in mid-2022; 5.75 per cent by mid-2023; and 5.25 per cent by mid-2024.
More than 8 in 10 (85 per cent) of the 1.3 million Australians that lost their jobs or saw working hours cut are back in work.
“Australia's economic recovery from the Covid crisis is now expected to be faster than our recovery from previous recessions, Frydenberg said.
Government support payments will cost the Commonwealth $6.5 billion less next year than what was anticipated in the 2020 Budget.
Here’s what’s new in the 2020-21 Federal Budget update.
If you work in the aged care sector…
You’ll see an extra $1 billion in funding go towards this industry. $850 billion will be spent on 10,000 additional home care packages.
This brings the number of extra places added since late last year to nearly 50,000, said Trade Minister Simon Birmingham.
Council on the Ageing (COTA) chief executive Ian Yates has already welcomed the new packages, describing the move as “a promising step” towards ensuring older Aussies are able to live as home as long as they can, and are not prematurely forced into residential care”.
Labor leader Anthony Albanese has said the funding isn’t enough, calling for a “comprehensive plan” to deal with aged care and the Covid-19 crisis.
If you’re on JobSeeker...
The Government has committed $3.2 billion to extend temporary support for the JobSeeker Payment for a further three months, from 1 January to 31 March 2021.
For that period, it will be paid at rate of $150 per fortnight.
If you’re in the aviation industry...
The Government is extending the Domestic Aviation Network Support Program, which will guarantee domestic air routes until 28 March 2021.
The Government will also pay 50 per cent of domestic air services charged for key operators from January to 31 Match 2021.
If you’re building a home...
The Government will continue its. support for the residential construction sector by extending the HomeBuilder program to 31 March 2021.
This will support construction activity over 2021 and into 2022.
If you want to get the Covid-19 vaccine...
The Government will provide a further $1.5 billion to support Australia’s Covid-19 vaccine and treatment strategy, including advance purchasing agreements to acquire the Pfizer/BioNTech and Novavax vaccines.
The Government will also provide $75 million to support the COVID-19 Vaccination Program, including for tracking and monitoring systems, a national communication campaign, and program administration.
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