Treasurer expected to reveal biggest budget deficit since World War II
Treasurer Josh Frydenberg is expected to hand down the biggest budget deficit in more than 70 years in his economic update this morning.
He has flown to Federal Parliament in Canberra from virus stricken Victoria to announce the grim figures that will show the devastating economic toll of the pandemic.
A day after Australia recorded its worst day of infections, the update is expected to show that the second lockdown in Victoria will cost the national economy $3.3 billion, and damage economic growth in the September quarter.
"Forecasting is difficult at the best of times let alone in a once-in-a-century pandemic," Mr Frydenberg said.
READ MORE: Harsh reality of virus' economic impact to be addressed
The second wave of the virus in Victoria has cost the national economy $3.3 billion to date. Nine
But he is expected to reveal company tax receipts down by more than $25 billion over the past financial year and the current one
Mr Frydenberg is set to reveal that by the end of May, revenue had plunged $18 billion while spending had increased by $52 billion, pushing the national deficit to $65 billion.
That is likely to be closer to $100 billion over the past financial year, according to economists and $200 billion in this one.
The figure eclipses the biggest previous deficit of $54 billion set just after the Global Financial Crisis of 2008.
Some experts predict the nation's total debt to balloon to $850 billion in the coming years.
Mr Frydenberg has said the current JobKeeper system is "unsustainable", with the government spending about $11 billion a month to support the country's workforce.
JobKeeper payments have contained the number of Australian jobless but the Federal Government says it is unsustainable in the long term. AAP
"I don't think we have seen uncertainty like this in a global and indeed a national economy in living memory," he said.
"Right now, we are spending $11 billion a month on JobKeeper. That is unsustainable if we kept that program going indefinitely."
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