Australia’s deficit has ballooned to nearly $65 billion with revenues plummeting and spending skyrocketing in response to the coronavirus pandemic.
The monthly financial statement for May, released on Friday, shows the underlying cash balance for the 2019/20 financial year to date was $60.8 billion worse than projected in the mid-year budget update.
“You will see there’s a lot of red ink on those statements,” Prime Minister Scott Morrison told reporters in Canberra.
All up, the government’s revenue fell by more than $28 billion below expectations.
This includes a $13 billion drop in the company tax take and $5.9 billion wiped off income tax payments.
At the same time, government spending is $32.9 billion higher than planned.
But Mr Morrison said his government didn’t resile from any of the decisions it had taken.
“They’ve been absolutely necessary to ensure that Australia has not only had one of the best health responses to the COVID crisis and that continues, but also one of the best economic responses,” he said.
The opposition points out the budget is now running its biggest deficit in at least 50 years and net debt is also at a record-high $463.7 billion.
Labor’s finance spokeswoman Katy Gallagher acknowledged the spending on programs to support jobs and households had been essential.
She called on the government to release its review of JobKeeper immediately, not wait until July 23, and outline a clear plan for the economic recovery.