SYDNEY, June 28 (Reuters) – Coronavirus-induced border closures and blockades in Australia will have a lasting impact on government coffers and population growth, according to official forecasts released on Monday.
The Australian government’s “Intergenerational Report 2021” predicts the budget will remain in deficit for at least 40 years, a break from the long-standing rhetoric of the ruling Liberal-National coalition of “debt and disaster”.
“The economic crisis associated with the COVID-19 pandemic has placed significant constraints on public finances in Australia and around the world,” the report says.
“As Australia’s stronger-than-expected economic recovery has impacted the fiscal position, the effects of the pandemic on the budget are expected to be sustained over the long term. “
Last year Prime Minister Scott Morrison ditched his government’s obsession with the budget surplus in the wake of the pandemic and announced a massive fiscal stimulus package that led to a record deficit for fiscal 2020 / 21.
Australia’s economy rebounded strongly from its first recession in three decades in the second half of last year, aided by an earlier than expected reopening of coronavirus closings and massive monetary and fiscal stimulus.
“The economic recovery is well underway, but some effects of the pandemic will persist,” the report said.
Australia now expects its population to total 38.8 million by 2061, down from its last forecast in 2015, when it saw it reach 40 million by 2056. Its population currently stands at 26 million.
“This is the first time that there has been a downward revision of long-term population projections in an intergenerational report,” Treasurer Josh Frydenberg said in his speech.
“This means the economy will be smaller and the Australian population will be older than they otherwise would have been, with implications for our economic and fiscal performance. “
Responding to questions after his speech, Frydenberg reiterated that Australia would only open its international borders if it was safe, suggesting there was no urgency in bringing in foreign visitors and migrants.
Reportage de Swati Pandey ; Montage par Shri Navaratnam
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