Economic and Fiscal Update

The following are some of the highlights outlined in The Economic and Fiscal Update that was released by Treasurer Josh Frydenberg on 23 July 2020.

• The Government has provided economic support for workers, households and businesses of around $289 billion.

• The underlying cash balance is forecast to decrease from balance in 2018-19 to a $85.8 billion deficit in 2019-20 and a $184.5 billion deficit in 2020-21.

• The Government’s fiscal measures are estimated to have lowered the peak of the unemployment rate by around 5%.

• There are some positive early signs in the recovery with indicators suggesting that the unwinding of containment measures in the latter part of the June quarter has led to a noticeable recovery in activity and jobs.

• Real GDP is predicted to grow by 2½ per cent in 2021, after a fall of 3¾ per cent in 2020.

• As a result of the pandemic around 709,000 jobs were lost across the country in the June quarter. The unemployment rate is forecast to peak at around 9¼ per cent in the December quarter although labour market conditions are expected to strengthen beyond 2020.

• The economic and fiscal outlook remains highly uncertain. The Government will deliver the 2020-21 Budget on 6 October 2020.

Economic support

• This economic response has been designed to be temporary with measures to support individuals, households and businesses through the crisis. This includes the $85.7 billion JobKeeper Payment, expanded eligibility for income support payments, the Coronavirus Supplement, support payments for households, temporary cash flow support for employers, and increasing and expanding access to the instant asset write-off.

• More than 960,000 businesses and not-for-profits and more than 3.5 million individuals have been covered by the JobKeeper Payment. As at 16 July, payments totalled over $30 billion. The Government has a committed to the extension of the JobKeeper Payment and Coronavirus Supplement for those on income support.

• The Boosting Cash Flow for Employers measure has provided more than $16 billion in payments to more than 750,000 employers across Australia as at 16 July 2020.

• $2 billion is being invested to give hundreds of thousands of Australians access to retraining and up skilling in sectors with job opportunities, as the economy recovers from COVID-19. Of this, $1 billion is committed to the JobTrainer Fund, to provide up to an additional 340,700 training places to help school leavers and job seekers access short and long courses.

• The Supporting Apprentices and Trainees wage subsidy, which has supported around 83,000 apprentices and trainees, and around 48,000 employers, is being extended.As at 16 July 2020, payments totalled $377.6 million.

• The Home Builder program is assisting the residential construction industry by encouraging the commencement of new home builds and substantial rebuilds this year. Over the month of June, sales of new houses rose by nearly 80 per cent.

Health support

• The Government has committed $9.4 billion to build capacity and capability to support the health response to the COVID-19 pandemic. The Government is also providing $3.7 billion to build hospital system capacity for the COVID-19 response, including the National Partnership Agreement on COVID-19

• To ensure access to essential health services, the Government has enabled whole-of population Medicare subsidised telehealth services and provided $619.1 million to support bulk billing.

• The Government has also provided $122.1 million to support the mental health and wellbeing of Australians during the COVID-19 pandemic.

• The Government is also investing $131.4 billion in Commonwealth funding forAustralia’s public hospitals, an increase of 30 per cent over the previous five years, through the 2020-25 National Health Reform Agreement.

• In addition, the Government is providing $18.3 billion in new and existing funding over the next five years to ensure quality pharmaceutical services through theSeventh Community Pharmacy Agreement.The Government will continue to do what it takes to deliver the essential services on which Australians rely and to ensure a strong recovery.