A fiery exchange erupted between Federal Treasurer Josh Frydenberg and ABC’s Leigh Sales over the nation’s $213.7 billion budget deficit, when she reminded him of his criticism of the Labor government’s large deficit several years ago.
Shortly after the 2020 Budget was released on Tuesday night, Mr Frydenberg appeared on ABC News where he was forced to defend his government’s handling of this year’s economic crisis.
“In the 2008-2009 financial global crisis and the years after, the coalition attacked the then-Labor government on the grounds that debt and deficit were signs of incompetence and mismanagement,” Ms Sales said.
“Why shouldn't I apply the same argument to you?”
Mr Frydenberg said the two situations were incomparable, and said the Labor government “baked in spending”.
“Yes, but Labor's largest deficit was $54 billion and yours is four times that?” Ms Sales fired back. “Isn't the reason I shouldn't make the argument it was always dishonest and cynical as you are proving?”
“I think you are being cynical today,” Mr Frydenberg responded, before Ms Sales asked him to “treat the Australian public like adults”.
The nation’s deficit is the highest deficit since World War II.
It follows a once-in-a-century pandemic that saw 1 million Australians lose their jobs at the height of the unemployment crisis, 900,000 businesses turn to government assistance, millions raid their superannuation and a rollercoaster ride on the stock market.
Budget relies on vaccine by end of 2021
A coronavirus vaccine is expected to be rolled out across Australia by late next year, according to one of the budget's key assumptions.
The economic outlook warns the likelihood of forecasting errors is larger than normal, with further outbreaks or a fast-tracked immunisation program possible.
Australia's economy is predicted to grow 4.75 per cent next financial year after reaching the depths of the pandemic-triggered recession.
The forecast assumes a population-wide vaccination program would be in place across the country in late 2021.
General social distancing restrictions would continue in the meantime.
Victorian restrictions are assumed to gradually lift over the remainder of this year as case numbers fall, putting the state on par with others by Christmas.
State borders are expected to reopen by the end of the year, with the exception of Western Australia, which Treasury predicts won't allow interstate travel until April 2021.
A gradual return of international students and permanent migrants is also assumed through next year.
The outlook also looks at the impact of finding a vaccine faster or crippling outbreaks.
Under the best-case scenario, a vaccine would be rolled out from July next year resulting in a $34 billion economic boost from the main forecast.
But Victorian-style outbreaks triggering lockdown in parts of the country could cost the economy $55 billion.
The downside scenario is based on a quarter of the national economy being under severe containment measures between the start of next year and mid-2022.
Population growth is expected to slow to its lowest in more than 100 years, falling from 1.2 per cent in 2019/20 to 0.2 per cent in 2020/21, then rising to 0.4 per cent in 2021/22.
That is mainly attributed to net overseas migration falling to negative 72,000 people this financial year before improving to negative 22,000 the following term.
- with AAP
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