Australia’s budget deficit in 2021/2022 will be $30 billion lower than Treasury estimates, according to Deloitte Access Economics’ partner, Chris Richardson.
After a myriad of recommendations from the Aged Care Royal Commission, Prime Minister Scott Morrison set high expectations for a substantial increase in aged care industry funding in the federal budget, on 11 May, when he described it as “an aged care budget”.
Richardson’s prediction that budget deficits will be nearly $100 billion lower over the next four years than first predicted, should help Morrison and Treasurer Josh Frydenberg provide “an aged care budget” that will be remembers for all the right reasons.
The Reserve Bank of Australia on Tuesday upgraded the country’s economic outlook even as it maintained emergency stimulus settings, reflecting Governor Philip Lowe’s drive to push unemployment low enough to spark broad-based wages growth.
As the RBA kept the cash rate and three-year yield target at 0.10% on Tuesday, Lowe revised upwards the GDP growth to 4.75% this year and 3.5% in 2022. while the unemployment rate is expected to continue to decline to around 5% at the end of 2021 and around 4.5% at the end of 2022.
Mr Frydenberg’s budget is very likely to show an improved bottom line due to better employment outcomes that boost the tax take and cut welfare costs. It’s similarly benefited from the high price of iron ore, the nation’s largest export. The steelmaking ingredient is currently trading at around $190 a tonne and Citigroup is forecasting an extended shortfall in the commodity and expects new highs of $200 to be hit over the next few weeks.
Mainstream media has continually stated an additional $10 billion over four years in funding for the aged care sector will be delivered by Mr Frydenberg. We believe the figure will be higher.
Grant Corderoy, partner at industry consulting firm StewartBrown, expects substantially more cash will be allocated to aged care than in previous budgets.
“If I had to put a figure on it, I think something between $2.5 billion and $3.5 billion a year for the next two, maybe four, years,” he told Nine News.
The Weekly Source understands that the Morrison Government will allocate a significant amount of additional funding to the Home Care Package to markedly reduce the almost 100,000 people in the home care waiting list.
