‘Pretty big bucks’: Australia destined for record budget deficits

The coronavirus is set to blow a $360 billion hole in the federal budget over the next four years and the prospect of a budget surplus – which the Morrison government crowed about in December – won’t enter the realm of possibility until the latter part of the decade.

That’s according to Deloitte Access Economics’ Chris Richarson, whose closely watched Budget Monitor forecasts the largest budget deficits in Australian history landing in each of the next two years.

“We have $143 billion as the deficit this year – yes, I just said 143… followed by another $132 billion deficit next year,”

Mr Richardson attributes the explosion in national debt to the costs of defending the economy from the impacts of the coronavirus via increased expenditure through schemes like Jobkeeper, as well as the “really weak economy” in which tax takes will plummet.

“Those big deficits in ordinary circumstances would be terrible, but right now, given the pain of the moment, those big deficits should be thought of as money that is left in the pockets if families and businesses at a time when they need it most.

Click PLAY to hear Chris Richardson speak with Brooke Corte: