Australia to reveal state budget for 2021-2022
Australian Federal Treasurer Josh Frydenberg will submit the national government’s budget for 2021-2022 to the lower house of parliament today.
Treasury assessments released late last year indicated that Australia’s pandemic-induced recession would force Canberra to decrease its spending. However the labor market has vastly improved, recovering all jobs lost because of the pandemic. Additionally, the prices commanded by iron ore—Australia’s most lucrative export—have risen to around $200 per metric ton, discarding more severe deficit predictions. Increased iron ore prices are estimated to have lessened Australia’s revenue shortfall by up to $15 billion.
Representatives of the center-right Coalition government maintain that a cautious spending policy is needed. Yet, pre-announced portions of the budget appear to emphasize infrastructure development as a means of catalyzing economic growth, dedicating $3.1 billion to such improvements.
Expect parliament to approve the government’s proposal. Though the opposition Labor Party will likely argue that the proposal fails to provide full relief for populations affected by the pandemic, including women and immigrants, measures like increased infrastructure spending remain popular. In the medium-term, the government will likely use improving post-pandemic economic conditions to pursue economic growth through fiscal stimulus, ahead of national elections slated for 2022.
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