Finance Minister Machias Cormann has warned the figured contained in Tuesday’s Federal Budget will be “bad”.
Gross debit is set to soar past $1.1 trillion, while the deficit will peak around $210 billion, according to a report in The Australian.
The Morrison Government’s response to the coronavirus pandemic that plunged the nation into a health and economic crisis is expected to increase gross debt about 55 percent of GDP.
Senator Cormann on Monday said the response to the job losses and the health measures came at a cost.
“The numbers will be bad objectively, but we know why we are her,” he told ABC RN.
“We were hit by an unexpected coronavirus pandemic which has had a very severe impact on our economy”.
Senator Cormann said Australia entered the crisis in a stronger fiscal position than other nations.
“Having cushioned the blow, having saved as may jobs as we could, we are focused on the recovery,” he said.
Estimates contained in the budget will be based on the consumption of a coronavirus vaccine, which Senator Cormann said was based on the “best available advice”.
He remained tight-lipped on how many job measures the budget would create and would not weigh in on whether its apprentice wage subsidy model could be applied to other sectors.
On income tax cuts, Senator Cormann said the Labor Party would have to decide its position.
“Whether they want to stand in the way of more money in workers’ pockets, if that is what the budget delivers, then that’s going to be a matter for the Labor Party,” he said.
In the daily charts of AUD/USD, we can see that the Aussie dollar gained early in the Sydney session.
The Aussie dollar has been gaining against the dollar despite the economic drawdowns that Australia is experiencing. In the chart we can see that the price has bounced off the 0.70157 support level and is still threading higher despite the losses that Aussie had last week Friday.
Speculators are now staying on the sidelines for more confirmation of where the pair is headed. The upcoming U.S. Presidential Elections will greatly have an impact on the pair and we can see volatility in the coming days.
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