Treasurer Josh Frydenberg will tonight announce backdated tax cuts and an increase in the government's debt ceiling, in a budget unlike anything Australians have seen before.
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It's been labelled one of the most important budgets since World War II, and even though the word has lost meaning through overuse, it will contain "unprecedented" spending commitments and debt and deficit figures.
The challenge faced by the government is an economy in recession, where some industries will take longer than others to recover, and younger Australians are set to bear the brunt of job losses.
As part of pre-budget media interviews on the weekend, Mr Frydenberg promised spending that was targeted, temporary, proportionate and "designed to create jobs".
Things will get worse before they get better
Speaking of jobs, the unemployment rate is set to get worse before the end of the year.
Mr Frydenberg has said the rate won't reach the 10 per cent level previously predicted, but it will increase from its current level.
Factors contributing to the rate include people who had previously left the workforce attempting to re-enter, as well as job losses in Victoria, where strict restrictions on movement and businesses continue.
"[In] the history of previous recessions, unemployment went up the elevator but came down the stairs," Mr Frydenberg said on Channel Nine.
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"We saw in the 1980s it took six years to get unemployment down below 6 per cent where it started. We saw in the 1990s it took a decade, 10 years. Obviously we want to move quicker than that. That is why we're engaged in a full court press."
The levels of debt and deficit are also going to be higher than forecast in the July economic statement, with the debt ceiling set to be increased to more than $1.1 trillion, and the deficit for this financial year to be over $200 million.
What do we know already?
As is the way with federal budgets, billions of dollars of spending has already been announced, culminating in big-spending infrastructure announcements on Monday.
New apprentice wages will be subsidised, money will go to promoting manufacturing and small businesses will be given tax concessions to promote spending.
Assistance for first-home buyers to build their homes has also already been flagged, as has funding for digital business initiatives.
What is likely to be announced?
Tax cuts legislated for 2022 and 2024 are to be brought forward, with the cuts set to be backdated for this financial year.
While the JobKeeper wage subsidy program is set to finish in March next year, Mr Frydenberg has signalled wage subsidies aren't finished altogether.
"We're transitioning to the next phase," he said.
"What you will see in the budget is other initiatives, other economic support programs designed to spur activity and investment across the economy.
"That will create jobs because this budget is all about jobs."
There are also likely to be one-off stimulus payments for aged pensioners, who didn't receive the extra coronavirus supplement in their payments like JobSeeker recipients.
Sally Whyte
I report on a range of issues in federal politics and the public service, with a real passion for how decisions made in Canberra affect the lives of Australians.
I report on a range of issues in federal politics and the public service, with a real passion for how decisions made in Canberra affect the lives of Australians.
