Federal net debt is set to peak near $1 trillion, with $416 billion of cash deficits projected as the government locks in higher spending.
Even the government’s long term projections show no surplus on the horizon.
An underlying cash deficit of 2 per cent of GDP will be posted in the 2031 financial year, the budget documents said, although projections over that time frame are extremely volatile.
Payments will settle at more than 26 per cent of GDP, but in the 2021 financial year it will hit 34.8 per cent of GDP.
That compares to 24.5 per cent in the 2019 financial year, prior to COVID-19.
The deficit will measure $213.7 billion this financial year alone.
Unemployment will peak at 8 per cent in the December 2020 quarter and fall to 6.5 per cent by the June quarter.
GDP will fall by 1.5 per cent in the 2021 financial year, and grow by 4.75 per cent in the followign year.
Treasurer Josh Frydenberg said net debt would peak at $966 billion, or 44 per cent of GDP in 2024.
“COVID-19 has resulted in the most severe global economic crisis since the Great Depression,” Mr Frydenberg said.
“Across the world the equivalent of 600 million people have lost their jobs.
“The global economy is expected to contract by 4.5 per cent this year compared to just 0.1 per cent during the GFC.
“Australia has not been immune.
“Our economy has been hit, and hit hard.”
There’s about $74 billion of stimulus in the budget under the label of Jobmaker.
The biggest are tax changes, including a $31.5 billion tax package for businesses.
Planned income tax cuts for and an income tax offset will be brought forward too, costing $17.8 billion.