This week’s Budget will be delivered in a unique context, in the wake of the 2020 pandemic and by a federal government that has been forced by this circumstance to upend its usual approach to Budgets.
Through the government’s implementation of strict measures in how Australia dealt with the impact of coronavirus throughout 2021, the Federal Budget has been placed into a far better position than it was expected to be six months ago.
With the Federal Budget releasing tomorrow, it’s predicted to show that government revenues have increased dramatically in recent months, as the labour market recovered quickly, business profits have soared and consumer spending locally has increased. A healthy economy is benefitting the finances of the government.
The latest Budget Monitor from Deloite Access Economics says national income could be $31 billion stronger in 2020-21, $85 billion stronger in 2021-22, $102 billion stronger in 2022-23, and $114 billion stronger in 2023-24, than the Treasury was forecasting.
And because of the surprise strength of the economic recovery, the amount of deficit spending required by the government to support economic activity will be much less than forecast.
The 2021 Budget is hoped to be a record of the evolution of the government’s thinking and approach to economic growth that has occurred in the last 12 months.