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August 2020 - Bongiorno Financial Update

What's in this issue?

  • The Government expects the federal budget deficit to peak at a record $184.5bn this financial year. That’s around 9.7% of GDP, its highest since the end of WW2.

  • Ultimately, we expect it to be around $220bn as the Government unveils more stimulus & revenue recovers more slowly than projected by the Government.

  • The budget and associated debt blowout is unlikely to cause a major problem as public debt is relatively low, borrowing costs are very low, the Government is borrowing in $A’s & it’s not dependent on foreign capital. Letting the deficit rise is the right thing to do.

Antoinette Bongiorno