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The 2020-21 Mid-Year Economic and Fiscal Outlook (MYEFO) builds on the Economic Recovery Plan announced in the 2020-21 Budget.
In response to the crisis, the Government has provided $251 billion in direct economic support, with more than $138 billion having already flowed to cushion the blow for Australian households and businesses.
The 2020-21 MYEFO measures build on the substantial commitments announced in the 2020-21 Budget, including:

• $3.2 billion to extend the temporary Coronavirus Supplement and other income support measures
• $1.6 billion to secure access to COVID-19 vaccines and roll out a national Vaccination Program, as well as $500 million to extend vaccine support to our region
• $1.0 billion in new funding for aged care, including releasing an additional 10,000 home care packages
• $683 million for new and amended Pharmaceutical Benefits Scheme listings
• $506 million in new infrastructure investment commitments
• $241 million to extend the HomeBuilder program

These measures are underpinning a strong recovery from the COVID-19 pandemic, with Australia’s economic and health outcomes continuing to outperform almost every other developed nation.
Australia’s real GDP grew by 3.3 per cent in the September quarter after a fall of 7.0 per cent in the June quarter 2020.
On a calendar‑year basis, real GDP is forecast to grow by 4½ per cent in 2021 following a fall of 2½ per cent in 2020. This compares with 4¼ per cent in 2021 and a fall of 3¾ per cent in 2020 at Budget. The labour market continues to strengthen alongside the recovery in economic activity, with around 85 per cent of the 1.3 million people who lost their job or were stood down on zero hours in April now back at work.
The unemployment rate is forecast to peak at 7½ per cent in the March quarter 2021 down from an expected peak of 8 per cent forecast in the 2020-21 Budget.
The unemployment rate is now forecast to fall to 6¼ per cent in the June quarter 2022.
While these improvements are welcome, parts of the economy continue to be impacted by COVID-19 restrictions. There remains a long way to go until the economy fully recovers and the unemployment rate is brought down comfortably below 6 per cent.
Whereas labour market conditions have improved substantially for all age groups since the peak of the crisis, challenges exist for younger people and those in areas and industries most affected by virus shutdowns. Employment for 15-34 year olds is currently 3.1 per cent below its March level, while employment for people aged 35 and over is now above pre-COVID levels. This underscores the importance of the Government’s JobMaker Hiring Credit.
The global outlook remains challenging as COVID-19 outbreaks and containment measures continue and trade tensions continue to affect Australia’s exports.
As part of our responsible fiscal management, we continue to make prudent commodity price assumptions – with the iron ore price assumed to decline to US$55 per tonne by the end of the September quarter 2021.
The underlying cash balance in 2020-21 is expected to be a deficit of $197.7 billion, equivalent to 9.9 per cent of GDP. This is expected to improve over the forward estimates to a deficit of $66.0 billion in 2023-24 and to further improve over the medium term to a projected deficit of $45.7 billion or 1.4 per cent of GDP in 2030-31.
The $15.9 billion improvement in the underlying cash balance for 2020-21 since the Budget primarily reflects the faster-than-expected rebound in the economy.
The 2020-21 MYEFO includes $6.3 billion in new policy measures in response to the COVID-19 pandemic, bringing the Government’s direct economic and health support announced this year to $267 billion.
Extending the Coronavirus Supplement
The Government is providing $3.2 billion to extend the Coronavirus Supplement at a rate of $150 per fortnight and extend other temporary income support eligibility measures from 1 January 2021 to 31 March 2021.
Vaccines
The Government will provide $1.5 billion over two years from 2020-21 to secure a further 61 million doses of potential vaccine developed by Novavax and Pfizer/BioNTech. This is in addition to the University of Oxford vaccine.
COVID-19 vaccine investments will provide access to a total of 114.8 million potential vaccine doses.
HomeBuilder
Up to $241 million in additional funding to continue its support for the residential construction sector by extending the HomeBuilder program to 31 March 2021.
Aviation support
The Government will support the continuation of key inter-city and regional routes and smaller regional airlines through COVID-19. This includes extending the Domestic Aviation Network Support Program, guaranteeing major domestic air routes until the end of March 2021. The Government will also pay 50 per cent of domestic air services charges for key operators from January to end March 2021.
COVID-19 Consumer Travel Support Program
The Government will provide $128 million for a one-off targeted grant program to support travel agents. Payments will be scaled, with a minimum of $1500 for a business with a turnover of $50,000, up to a maximum payment of $100,000 for a business with a turnover of up to $20 million. The Government recognises that many travel agents continue to process refunds for consumers who have cancelled travel, at the same time as they manage ongoing uncertainty about international travel due to the impacts of COVID-19.
The 2020-21 MYEFO also includes new measures under the JobMaker Plan to create a stronger, resilient and more productive economy.
Infrastructure investment
The Government’s record 10-year transport infrastructure investment pipeline was accelerated and expanded to $110 billion in the 2020-21 Budget. The Government is committing a further $506 million over three years for priority transport infrastructure to support local jobs and the economic recovery.
Aged care
This MYEFO includes $1.0 billion in new investment in aged care, building on the $4.1 billion in new funding to the aged care sector announced since the 2019-20 MYEFO. $851 million is being provided for an additional 10,000 home care packages.
The Government has responded to the recommendations of the Royal Commission into Aged Care Quality and Safety’s special report on COVID-19 and is continuing to respond to COVID-19 in aged care, investing $147 million, including funding for new items on the Medicare Benefits Schedule to improve access to psychological treatment and allied health services in residential aged care.
The Serious Incident Response Scheme implementation has been brought forward to 1 April 2021.
The 2020-21 MYEFO is available at www.budget.gov.au

Communities along New South Wales’ North Coast have come together at New Italy to celebrate the completion of the Pacific Highway upgrade, with the final section, from Woolgoolga to Ballina, now open to traffic.
Prime Minister Scott Morrison said this marks a historic day, as the largest road infrastructure project to be undertaken in Australia is now complete, delivering 657 kilometres of duplicated highway from Hexham to the Queensland border.
“We set the goal to deliver this $15 billion project by the end of 2020 and despite the challenges we’ve faced along the way such as bushfires and the COVID-19 pandemic, we’ve delivered,” the Prime Minister said.
“Across New South Wales, we will be getting people home sooner and safer for generations to come thanks to this generation-defining infrastructure project.”
NSW Premier Gladys Berejiklian said the upgrade had created more than 100,000 direct and indirect jobs over its lifespan.
“Since the first shovel went in the ground, this project has injected billions of dollars into the economy, and it will drive long-term benefits for businesses and communities along the North Coast,” the Premier said.
“We continue to invest in improving journeys from Sydney all the way to the Queensland border, with almost $4 billion committed by the NSW and Australian governments to build the Coffs Harbour bypass and extend the M1 Pacific Motorway to Raymond Terrace.”
Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack said it was a landmark day for communities right along the North Coast.
“The Pacific Highway is more than a road to them – it is part of their story, connecting them to the rest of Australia and each other,” the Deputy Prime Minister said.
“More than 40,000 people, including many locals, have worked directly on this project over 24 years. They should be proud that they have helped deliver safer, faster and more reliable journeys to millions of motorists every year.”
NSW Deputy Premier John Barilaro said the upgrade had transformed journeys along the North Coast, cutting travel times by more than two and a half hours.
“Not that long ago the Pacific Highway was known as a goat track, but now it’s 657 kilometres of dual-carriageway highway, which will support tourism, unlock new opportunities for regional economies and drive higher productivity for freight,” the Deputy Premier said.
“Many people have fought passionately to bring this project to life over many years – and today their vision of a four-lane highway is finally a reality.”
NSW Minister for Regional Transport and Roads Paul Toole said the number of fatal crashes on the highway had more than halved since the upgrade began.
“From day one, this upgrade has been about saving lives,” Minister Toole said.
“Since the upgrade began in 1996, fatalities have fallen by more than half. To put it in context, in the next 20 years it is expected that there will be 8,039 fewer crashes, 4,218 fewer injuries and critically 565 lives that will be saved. That’s 565 families who will see their loved ones come home at the end of the day.”
Assistant Minister to the Deputy Prime Minister and Federal Member for Page Kevin Hogan said the scale of the project demonstrated the Australian Government’s commitment to improving local infrastructure in the state of NSW.
“The project has been a remarkable engineering feat with more than 600 new bridges built along the stretch from Hexham to the Queensland border, and more than 35 new or improved rest areas now available for drivers,” Assistant Minister Hogan said.
State Member for Clarence Chris Gulaptis said the project was a source of vital support for the region.
“Infrastructure keeps people employed and regional economies ticking, supporting safer, faster journeys for our local community and freight operators,” Mr Gulaptis said.
The Pacific Highway upgrade has been jointly funded by the Australian and New South Wales governments over more than 20 years from 1996 to 2020.
The final section of the Woolgoolga to Ballina project – the last project to be completed as part of the Pacific Highway upgrade – is now fully operational.

The Future Fund must divest the $3 million it has put into a railway for the climate-destroying Adani coal mine, the Greens say.

Greens Economic Justice Spokesperson Senator Nick McKim said.
“This is public money and should be invested for the public good.”
“Having already ruled out investing in tobacco products, the Future Fund must urgently get out of fossil fuels.”
“This is a bad investment financially, morally and environmentally. To use public funds to cook the planet is an extraordinary error of judgement.”
“Adani has an appalling environmental and human rights record. They do not deserve a single cent of public money.”
Greens Leader in the Senate and Spokesperson for Mining and Resources Senator Larissa Waters said:
“Australians would be horrified to know that their so-called Future Fund is funding projects that would wreck their future.”
“Public money should not be used to prop up unviable projects that will worsen the climate crisis which is cooking the reef and turbo charging extreme weather events.”
“The Greens have long campaigned for the Future Fund to divest from coal on economic and climate grounds, and now also on human rights grounds.”
“There is no economic future in coal as global market dwindle as the world embraces renewable energy to tackle the climate crisis.”

Funding announced today in Newcastle will ensure the Leaders in Indigenous Medical Education (LIME) Network can continue to build capacity in Australia’s Indigenous Health workforce.
Federal Regional Health Minister Mark Coulton said the $680,000 of funding would enable the network to continue to increase the number of Indigenous people choosing to study medicine while ensuring a quality indigenous health curriculum is taught in medical schools.
“Growing the number of Aboriginal and Torres Strait Islander doctors and ensuring our health workforce has the culturally appropriate skills and training to improve the health of Aboriginal and Torres Strait Islanders is an Australian Government priority,” Minister Coulton said.
“The LIME Network has been undertaking important work and the additional funding will enable further engagement with current and prospective Aboriginal and Torres Strait Islander doctors.”
Professor Peter O’Mara, Director of the Thurru Indigenous Health Unit at the UoN’s School of Medicine and Public Health, said LIME makes a huge contribution to the work at Thurru Indigenous Health Unit, and has been instrumental in helping achieve an ever-growing numbers of Indigenous medical students.
“In 2020, 10 percent of our commencing joint medical program students were Aboriginal and Torres Strait Islanders, and 17 will be graduating this year,” Professor O’Mara said.
“The LIME Network is a project of the Medical Deans Australia and New Zealand and, by working across all medical schools and having this broad network of Indigenous leads, academics and support staff, the sharing of experiences, ideas, challenges and new initiatives is so much stronger and more effective.”
Also joining the announcement was Wiradjuri men Mr Nathan Towney, Pro Vice-Chancellor of the Office of Indigenous Strategy and Mr Darren Nolan from the School of Medicine and Public Health from the University of Newcastle.
Noongar woman, Professor Sandra Eades, Dean and Head of Curtin Medical School in WA participated virtually to mark the occasion and is Australia’s first Indigenous Dean to a medical School.
During his visit to the University of Newcastle, Minister Coulton also met with Professor Jennifer May, Director of the University’s Department of Rural Health, to hear about the delivery of the Rural Health Multidisciplinary Training (RHMT) Program.
“Over 20 years this successful training program has driven rural training and helped build the capacity of the rural health workforce by providing a rich experience for students in rural settings,” Minister Coulton said.
“By offering pathways for Aboriginal and Torres Strait Islander students and those from rural backgrounds, the university is leading the way in nurturing and retaining local knowledge and talent.
“The Government continues to support the delivery of quality, multidisciplinary, rural health training. Most recently in the 2020-21 Federal Budget, I announced a further $50.3 million to expand the long-standing program and keep building the rural training pipeline.
“Evidence shows medical students who undertake training in rural areas, and those from a rural background, are more likely to take up rural practice after graduation. “
Minister Coulton said building the capacity and capability of the Aboriginal and Torres Strait Islander health workforce, and increasing Aboriginal and Torres Strait Islander cultural awareness in the broader health workforce is key to better health outcomes now and into the future.
BACKGROUND:
The LIME Network, managed by the Medical Deans Australia and New Zealand, will receive funding support of more than $680,000 in 2020–2021 for its work to:

• Support quality and effective teaching of Indigenous health in medical education;
• Recruit and retain Indigenous medical students;
• Engage and collaborate with medical schools, the Australian Medical Council, the National Aboriginal Community Controlled Health Organisation and other Indigenous peak organisations;
• Boost mentoring opportunities for Indigenous medical students and early-career academics; and
• Build on the Indigenous Health Resources Hub which supports sharing information on research, experiences and initiatives in Indigenous health education.

This funding takes the Government’s total investment in LIME since 2017–18 to more than $2 million.

Today’s Housing Industry Association (HIA) New Home Sales Report for November 2020 shows HomeBuilder is continuing deliver on its objective of generating residential construction demand to protect tradies’ jobs and drive our comeback from the COVID-19 recession.
The Report showed new home sales have risen by a further 15.2 per over the month to set a new decade high, with sale in the three months to November 41.1 per cent higher than the same time last year.
Every new home sale represents more work for our tradies and more economic activity as part of our comeback. HIA’s economist Angela Lillicrap said today;
“The strength of New Home Sales is a positive sign that home building will support the broader economy as we enter 2021.”
The HIA also found that new home sales in the three months to November 2020 were higher in all regions when compared with the same period in 2019:

• Western Australia (108.8 per cent),
• South Australia (57.6 per cent),
• Queensland (34.0 per cent),
• Victoria (22.2 per cent), and
• New South Wales (20.7 per cent).

First home buyers are leading the way in the housing comeback from the COVID-19 recession:

• According to the ABS, the number of loans to first home buyers reached the highest number in over a decade, accounting for 42 per cent of the total number of owner occupier loans issued in October.
• NAB lending to first home buyers increased by 21 per cent against their 12-month average, with regional areas across the nation recording a 44 per cent increase in first home buyer activity.
• Real Estate Institute of Australia reconfirmed that in their Housing Affordability report. First home ownership is at 10 year high.

To maintain this momentum in Australia’s economic comeback, the Morrison Government has announced HomeBuilder will be extended until 31 March 2021.
For all new build contracts signed between 1 January 2021 and 31 March 2021:

• Eligible owner-occupier purchasers will receive a $15,000 grant; and
• The property price caps for new builds in New South Wales and Victoria will be increased to $950,000 and $850,000 respectively.

In addition, the construction commencement deadline will be extended from three months to six months for all eligible contracts signed on or after 4 June 2020.
The construction industry has said the extension of HomeBuilder will mean a steady pipeline of construction activity through to 2022, which will keep tradies on the tools.
More information on the HomeBuilder programme can be found at: https://treasury.gov.au/coronavirus/homebuilder