For the second year in a row we have had disruption to the Australian Federal Budget. In 2019 the budget was earlier than usual due to the Federal Election, whilst in 2020 it has been deferred from the traditional 2nd Tuesday in May spot to the 6th October due to the fiscal impact of the Coronavirus Pandemic.
As such our global Budget Review Seminar tour has once again been disrupted and in the case of 2020, cancelled as yet another casualty of COVID-19.
The deferral might have saved the Government from the embarrassment of announcing their assured return to surplus had not been achieved. Having been burned by the bushfires, they now are coughing their way through COVID-19 and the recent sluggish economic performance which is now being further belted by business and border shut downs, support payments and bailouts. This has seen the books move from a likely surplus to a deficit of almost A$40bn in the 10 months to April 2020. April alone was a cash deficit of almost A$19bn and given we are yet to see the relaxing of major restrictions in Australia, we can expect the monthly deficit to remain huge on the back of high unemployment, no international tourism and reduced economic capacity due to prevailing restrictions.
The end cost of the pandemic management measures will be hundreds of billions of dollars and take many years to normalise even before we start making the hard effort of repaying the accrued debts for the measures. And believe it or not, Australia is one of the best performers!
These numbers are frightening to me as an accountant, but somehow the world seems content with pushing these debt boundaries to their limit so all we can do is sit back and hope they have this figured out correctly.
It is still yet to be seen whether or not we will be able to travel internationally by October 2020 for our Annual Update Seminar Tour, so even that schedule can’t yet be confirmed, but regardless of whether or not we travel, this years Budget and Update Seminar will merge into one and in the current climate there will be lots to talk about and discuss.
We look forward to keeping you up to date as things progress in these extraordinary times.
