It wasn’t that long ago that Treasurer Josh Frydenberg was boasting that the last time Labor delivered a Budget in surplus he had long hair.
The mullet has disappeared now and so too the Morrison Government’s dream of handing down the first Budget surplus in a decade.
Instead, the deficit has exploded to $85 billion in the last financial year, a figure that will double to $200 billion this year.
After all those moody “back in black” ads during last year’s election, the Budget is bleeding red tonight.
The Prime Minister has been talking up the idea that tonight’s Budget is the most important since the end of World War II.
Lord knows it will be more expensive.
The economic catastrophe that unfolded after the Global Financial Crisis looks like a Sunday picnic compared to the coronavirus.
But that’s OK, according to the Morrison Government, now busily embracing Keynesian deficit spending to lift Australia out of recession in a big, big way.
To put it into perspective, the Prime Minister has described the COVID-19 recession as about 40 times worse than the GFC.
Tax cuts in your pocket now just as revenue is being slashed and the Victorian economy remains in the deep freeze?
Why yes indeed, and it’s hoped the tax relief will help create thousands of jobs.
When you consider the tax cuts are worth $12 billion this year and tax revenues are forecast to plunge by $227 billion over the forward estimates it’s hard to argue that the income tax cuts alone are a big problem in the revenue dip.
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Labor supports the tax cuts for low- and middle-income earners, which means the cash should be in workers’ pay packets by the end of the month.
But there are concerns that the new JobMaker wage subsidy will only be offered to workers aged under 35.
If the Prime Minister has his way though, the tax cuts will pass Parliament this month and cash will be in workers’ pockets under the same time frame.