Pandemic to cost Australia government $131 billion this year

CANBERRA, Australia (AP) — Australia’s response to coronavirus pandemic tipped government’s budget 85.8 billion Australian dollars ($61 billion) into red in last fiscal year and will create AU$184 billion ($131 billion) more debt in current year which would be nation’s biggest deficit since World War II, treasury figures showed on Thursday.

Treasurer Josh Frydenberg revealed Australia’s crumbling ecomic outlook based on increased government spending to stimulate to ecomy and declining tax revenue.

conservative government h forecast in December a AU$5 billion ($3.6 billion) surplus in fiscal year that ended June 30, 2020: first surplus in 12 years.

”Coronavirus has h a significant impact on budget bottom line,” Frydenberg said.

“re is significant uncertainty which means that it would t be possible at this point to make credible forecasts and projections beyond what we present to you today,” he ded.

Australia has been in a recession throughout calendar 2020, partly due to drought and wildfires that preceded pandemic. government has spent AU$289 billion ($206 billion) in pandemic relief measures to save jobs and businesses.

ecomy is forecast to grow by 1.5% in September quarter and 2.5% next year.

forecasts are based on some optimistic assumptions including that a lockdown in city of Melbourne will be lifted after six weeks and that international borders will reopen in January.

government h been scheduled to release in May its ecomic plans for current fiscal year which started on July 1. But because of ecomic turmoil, release of that plan was delayed until Oct. 6.