Australia's federal deficit soared to a record $64.9 billion, largely as a result of the government's unprecedented bail-out and economic stimulus package during the new-crown pneumonia crisis, as well as tax cuts.
The latest monthly data provided by the Federal Ministry of Finance shows that the basic cash balance is 61 billion yuan less than it predicted three months before the outbreak of the COVID-19 epidemic, the mid-term economic and financial outlook report last December.
During the 11-month period ending in May, the amount paid was $32.9 billion higher than forecast at the end of last year, reflecting a surge in emergency expenditures related to the epidemic crisis, including a JobKeeper salary subsidy of $1,500 per fortnight, a one-time benefit of $750 and a sharp increase in unemployment benefit expenditures. While spending spiked, government revenue plunged as economic stagnated.
Gross income was $28.2 billion less than projected in the Interim economic and Financial Prospects Report. Tax revenues fell by 26.8 billion yuan, major corporate taxes by 13 billion yuan, and personal income taxes by about 5.9 billion yuan. The net debt of federal government reached 463.7 billion yuan by May ,70 billion yuan higher than forecast on June 30 last year.
Although the budget deficit is now at record levels, with one month remaining in the current fiscal year, it accounts for 3.3 per cent of the GDP, below the 4 per cent level reached after the global financial crisis.
The Office of the parliament Budget, however, estimates that the new-crowned pneumonia epidemic could increase the deficit by 191 billion yuan for the 2020-21 fiscal year compared with projections in the Medium-term economic and Financial Prospects Report, indicating that the deficit represents about 10 per cent of the GDP, a level that has no precedent outside wartime.
While australia's fiscal deficit and debt soared as the crisis unfolded, economic was slowly recovering from the gradual unsealing and liberalisation of epidemic control in western countries, international credit rating agency moody's (Moody's) confirmed this week that australia maintained AAA credit rating and that the country's fiscal outlook was "stable ".
