Chalmers’ profligate, partisan and possibly prescient budget

This is a whiplash budget in terms of fiscal outcomes. We’re going from what the government expects to be a surplus of 0.3% of GDP this current financial year, to a whopping $28 billion, or 1% of GDP, deficit, in the financial year starting on July 1. And it’s supposed to get even worse after that, with an eye-watering $42 billion deficit the year after — although our recent fiscal experience suggests that is too far away to take seriously.

It’s the biggest fiscal turnaround since the pandemic pushed the Morrison government from a budget within a whisker of being balanced to successive deficits totalling $220 billion, and before that when the financial crisis saw the Rudd government, which inherited a $20 billion surplus, switch to more than $80 billion in deficit spending over 2008-10.