THE Morrison Government have brought down the largest budget deficit in more than 75 years, while attempting to spend its way out of a crippling recession by targeting fast-growing cities including the Gold Coast.

Treasurer Josh Frydenberg on Tuesday night framed the COVID-19 budget as a road to recovery plan, focused heavily on kickstarting the economy and setting Australia back on the path to prosperity.

Treasurer Josh Frydenberg brought down his second budget on Tuesday night (Photo by Sam Mooy/Getty Images)
Treasurer Josh Frydenberg brought down his second budget on Tuesday night (Photo by Sam Mooy/Getty Images)

The Treasurer pitched the budget as guaranteeing essential services and throwing billions at major infrastructure projects without raising taxes.

As a result of COVID-19, the budget deficit will reach $213.7 billion in 2020-21 before falling to $66.9 billion by 2023-24.

Net debt will increase to $703 billion or 36 per cent of GDP this year and is tipped to peak at $966 billion or 44 per cent of GDP in June 2024.

"This is a heavy burden, but a necessary one to responsibly deal with the greatest challenge of our time," Mr Frydenberg said in his budget speech.

"The Australian economy is now fighting back. More than half of those who lost their jobs are back at work.

"There remains a monumental task ahead but there is hope. Australia is up to the task.

"We embark as a nation on the next phase of our journey, a journey to rebuild our economy and secure Australia's future."

Artist impression of the Coomera Connector.
Artist impression of the Coomera Connector.

As promised for the Gold Coast, more than $750 million has been committed to funding the 16km first stage of the Coomera Connector.

The federal funding matches the $755 million already committed by the State Government in September, with construction set to begin in mid-2021.

Mr Frydenberg mentioned the Coomera Connector in his budget speech and said it was one of the critical projects which would help rebuild the economy.

"Measures in this Budget will see $14 billion in new and accelerated infrastructure projects support a further 40,000 jobs," he said.

Funding for a study on high-speed rail between the Gold Coast has been fast-tracked.
Funding for a study on high-speed rail between the Gold Coast has been fast-tracked.

"Funding for these shovel-ready projects will be provided on a use it or lose it basis.

"If a state drags its feet, another state will get the money. We need works to start, not stall. This will boost productivity and deliver long term benefits for Australians."

There was also more than $14 million committed to accelerating existing transport infrastructure projects in Queensland, including $4.2 million for a business case on fast rail between Brisbane and the Gold Coast.

The business case, announced in March 2019 before that year's election, will also look at the need for extending the existing rail line - or a new fast rail track - from Varsity Lakes to Gold Coast Airport.

The existing train connection between the two cities takes 74 minutes at an average speed of 69km/h, but the fast rail being envisaged would race along at a striking 160km/h.

It is the second budget from Prime Minister Scott Morrison and Treasurer Josh Frydenberg Picture: NCA NewsWire / Gary Ramage
It is the second budget from Prime Minister Scott Morrison and Treasurer Josh Frydenberg Picture: NCA NewsWire / Gary Ramage

Key points in the budget include:

* $1080 in personal income tax cuts originally scheduled for 2022 will be backdated to this financial year.

* Fringe Benefits Tax will be removed for many businesses. Companies with turnovers of between $10 million and $50 million will be able to access up to 10 small business tax concessions.

* The government's First Home Loan Deposit Scheme to be expanded to include an extra 10,000 first home buyers for a new home or a newly built home.

* Pensioners will receive two additional economic support payments of $250 in December and March.

* $2.8 billion will be spent supporting trades including paying half the wages of 100,000 new apprentices and trainees, starting from October 5, regardless of geographic location, occupation, industry or business size.

Treasurer Josh Frydenberg and Finance Minister Mathias Cormann with this year’s budget papers. (Photo by Mike Bowers – Pool/Getty Images)
Treasurer Josh Frydenberg and Finance Minister Mathias Cormann with this year’s budget papers. (Photo by Mike Bowers – Pool/Getty Images)

Mr Frydenberg said the impact of COVID-19 would be economically felt for many years to come.

"Our economic and fiscal strategy sets out the path to grow the economy, stabilise debt, and then reduce it over time," he said.

"First, it focuses on boosting consumer and business confidence, growing the economy and creating jobs and once the recovery has taken hold and the unemployment rate is on a clear path back to pre-crisis levels, comfortably below 6 per cent, we will move to the second phase where there is a deliberate shift from providing temporary and targeted support to stabilising gross and net debt as a share of the economy.

"We will then rebuild our fiscal buffers, so that we can be prepared for the next economic shock."

 

 

Originally published as Coast rail cash splash in federal budget


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