This is an extraordinary giveaway budget, driven by desperate circumstances that would have been inconceivable less than a year ago. The debt and deficit numbers are predictably eye-watering – but the gamble is whether they are big enough.
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Accelerated tax cuts, cash splashes for pensioners, massive incentives for business to invest and a subsidy to hire unemployed people are the centrepieces of the Morrison government’s COVID-19 budget.
The government has announced a $537 million package for aged care in response to the damning interim findings of the royal commission.
The government has announced very broad terms of reference for its inquiry into Australia’s retirement income system, which will trigger fresh debate about the planned future rises in the superannuation guarantee rate.
Soon after the election Treasurer Frydenberg flagged there would be an inquiry into retirement incomes. Since then, no details have emerged.
The Morrison government has delivered an election-launch budget with big personal income tax handouts to attract voters and a A$7.1 billion 2019-20 surplus to display its economic credibility.
For the government this “election budget” is an exercise in juggling. On the one hand, it is throwing out voter bait. On the other, it is running hard on the theme of economic responsibility.
The April 2 budget will provide about A$600 million to pursue wrongdoers and help restore trust in Australia’s financial system.