Budget 2020: Experts applaud ‘hard, fast’ big spend

Josh Frydenberg has unveiled a big spending and stimulatory budget which will help secure the country’s post-COVID recovery, economists said.

Josh Frydenberg, left, Mathias Cormann and Michael McCormack at Parliament House in Canberra on Tuesday. Picture: Martin Ollman

Josh Frydenberg has unveiled a big spending and stimulatory budget which will help secure the country’s post-COVID recovery, economists said.

ANZ budget expert Cherelle Murphy said the spending initiatives announced last night would be coming “hard and fast”.

“There is certainly a lot in there in terms of tax cuts, handouts to households, and of course a lot of direct support to business which is very stimulatory in the current and next year – which is where it should be,” Ms Murphy said. “It is an appropriate budget for the time: fiscal conservatism has gone out of the window.”

The Treasurer last night said the government had “no choice” but to take on the nation’s biggest deficit since WWII.

Ms Murphy estimated that the budget unveiled an extra $110bn worth of stimulus over the forward estimates against the July update, but “most of that is in this and next year”.

After downgrading the outlook on the country’s AAA debt rating to “negative” in April, global ratings agency Standard & Poor’s director Anthony Walker said the budget “confirms that the COVID-19 pandemic and stimulus packages will weigh on fiscal outcomes for years to come”.

But Mr Walker noted that the country’s “economic recovery is underway, and Australia is outperforming most of its peers”.

KPMG chief economist Brendan Rynne said budget measures such as tax incentives for businesses, wage subsidies for taking on new workers and loosened insolvency laws meant the government was making an “all-in bet on markets and incentives”.

“What he is really doing is calling up the private sector to basically pony up and kickstart the economy,” Mr Rynne said. “We think the Treasurer’s done a good job.”