The Final Budget Outcome for 2019-20 shows Australia’s budget is in a much stronger position than many other comparable nations despite the significant health and economic challenges from COVID-19.
COVID-19 has caused severe economic contractions the world over, and to help cushion the blow for Australians the Morrison Government has provided an unprecedented level of support to households and businesses.
Through the Morrison Government’s strong fiscal management, Australia entered the COVID-19 crisis in a position of economic and fiscal strength.
The decisions we made prior to this crisis have improved our budget position by more than $250 billion.
This put us on a better, more sustainable fiscal trajectory for the future before we went into this crisis. If we had not done that, we would have had less fiscal capacity to respond and our economy would have been less resilient.
Returning the budget to balance for the first time in 11 years underpinned our capacity to respond to this unprecedented shock, with more than $300 billion in economic support committed to date. At the same time, our AAA credit rating has been reaffirmed during the pandemic by all three major credit ratings agencies.
Total cash payments were $57.7 billion higher than the 2019-20 MYEFO estimate, as Government supports like JobKeeper, the Coronavirus Supplement, the CashFlow boost and other economic support payments were made to Australians.
While payments increased as a result of COVID-19, total receipts were $33.1 billion lower than estimated at the 2019-20 MYEFO as economic activity across the world and Australia slowed.
The Australian Government general government sector recorded an underlying cash deficit of $85.3 billion in 2019-20.
This is a $0.5 billion improvement compared to the Economic and Fiscal update in July, but a $90.3 billion deterioration since the 2019-20 MYEFO.
A net operating deficit of $92.3 billion was recorded for 2019-20 compared with a pre-COVID-19 surplus of $8 billion estimated at the time of the 2019-20 MYEFO.
General government net debt was $491.2 billion (24.8 percent of GDP) which was $98.9 billion higher than estimated at the time of the 2019-20 MYEFO.
Despite our increased debt levels, they remain lower than many comparable nations with the average debt to GDP ratio for advanced G20 economies expected to exceed 100 per cent in 2020.
We will release the next instalment of our economic plan to help rebuild Australia’s economy and to get people back to work in the 2020-21 Budget on 6 October 2020.
The 2019-20 Final Budget Outcome document can be found via www.budget.gov.au