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‘It’s a pandemic Budget’: Frydenberg defends skyrocketing debt

Published: (Updated: ) in Australian News by .

The Treasurer says the government “can manage” its trillion-dollar debt, even as he confirms billions designed to drive unemployment to historic lows.

Treasurer Josh Frydenberg has defended the federal government's record debt and deficit levels, even as he confirms billions in new expenditure designed to drive unemployment to historic lows.

Speaking on Weekend Today this morning, Mr Frydenberg told Nine's political editor Chris Uhlmann that Tuesday's Budget will include more than $10 billion for aged care over the next four years.

"It is a very significant commitment designed to deal with what the Royal Commission has found, to strengthen our system and ensure that older Australians can retire, can live with dignity, respect and with safety," he said.

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The funds will support in-home care as well as improvements to residential facilities.

In another new announcement today, the Morrison government has confirmed that more than $350 million will be allocated to supporting women's health, including cervical and breast cancer,

The funds will include just over $100 million for improved cervical and breast cancer screening and $95.9 million for genetic testing of embryos for genetic or chromosomal abnormalities.

"In 2009, GPD (global domestic product) fell by 0.1 per cent – last year, it fell by 3.1 per cent.

Since the start of the coronavirus pandemic last year, the total level of Commonwealth debt has skyrocketed to unprecedented highs.

It is forecast to soon surpass $1 trillion – almost five times the level seen during the height of the Global Financial Crisis.

Then, the Coalition lambasted Labor's spending as a "debt and deficit disaster" creating a "Budget black hole".

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But Mr Frydenberg told Uhlmann that the Coalition's response has been proportionate to the current crisis.

"There has been a once-in-a-century pandemic," he said.

"In 2009, GPD (global domestic product) fell by 0.1 per cent – last year, it fell by 3.1 per cent.

"You can't compare the two events in terms of size and the dislocation they have caused."

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He said that while Budget funding for aged care and childcare were "baked in" to the Budget as long-term measures, other expenditures such as new infrastructure projects and tax relief were short-term steps to boost the economy and return employment to pre-pandemic levels.

Of the government's record expenditure, $90 billion of it was poured into JobKeeper to keep Australians in work through COVID-19 lockdowns and a global economic slow-down.

It is a spend the Treasurer credits with today's falling unemployment and Australia's relatively swift economic recovery, compared to other nations.

But the government has set itself a new unemployment target, with Mr Frydenberg saying he hopes to drive it down below 5 per cent – a low not maintained since the 1960s.

Currently, the unemployment rate is at 5.6 per cent with the historic long-term average since the 1970s of around 6 per cent.

Mr Frydenberg said this will be achieved through fresh investment in apprenticeships, jobs programs and tax relief which will boost the economy in the short-term and create jobs.

"It is designed to boost the long-time productivity of the nation by boosting demands in the short term with stimulus measures like tax relief," he said.

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"Our focus is not to bake (these measures) into the Budget and we are not seeking to undermine the structural integrity of the budget... but to frontload the Budget."

Source: 9News https://www.9news.com.au/national/federal-budget-2021-treasurer-josh-frydenberg-defends-trillion-dollar-debt-confirms-more-than-10-billion-for-aged-care/25cc1d93-d7cc-49cb-9838-7a7309455461

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