As Australia continues to grapple with its first recession in 30 years, Treasurer, the Hon Josh Frydenberg MP, is looking to steer the economy back to historic growth levels in his upcoming Budget.
In the path back to economic growth, which has resulted in an unprecedented increase in Federal Government spending, Treasurer Frydenberg is seeking to set the stage for a return to a private sector-driven economy.
With these factors in mind, here are our key insights on Treasurer Frydenberg’s economic plan and insights on the next Federal Budget to be tabled on October 6, 2020.
Frydenberg has an accomplished history in Law and Economics, holding both degrees with Honours from Monash University and completed his articles of clerkship at Mallesons Stephen Jacques. Treasurer Frydenberg subsequently went on to graduate with a Masters in International Relations from Oxford University which he attended on a Commonwealth Scholarship and a Masters in Public Administration from Harvard University’s Kennedy School of Government.
Prior to entering politics, Frydenberg was a Senior Adviser with his friend and colleague, the Hon Greg Hunt MP to the former Foreign Minister Alexander Downer and Prime Minister The Hon John Howard AC in the 90s, before becoming Director of Global Banking at Deutsche Bank AG.
Treasurer Frydenberg was first Elected to the Australian Parliament in 2010 as the Member for Kooyong, In July 2016, he was appointed the Minister for the Environment and Energy, having previously served as Minister for Resources, Energy and Northern Australia, Assistant Treasurer and Parliamentary Secretary to the Prime Minister since the 2013 election.
On 24 August 2018, Frydenberg was elected Deputy Leader of the Liberal Party following a leadership spill, which saw the Hon Scott Morrison MP elected as Liberal Leader and Prime Minister. Prime Minister Morrison subsequently appointed Frydenberg as Treasurer of Australia.
In Treasurer Frydenberg’s first budget, the Government touted billions of dollars for tax cuts, major road upgrades and health care. At the time, the projected surplus for the 2019-20 FY was $7.1 billion.
ECONOMIC PLAN & BUDGET OUTLOOK
In the upcoming budget, to be handed down on 6 October, as a result of the COVID-19 pandemic, the deficit is expected to exceed $200 billion, dwarfing the previous record of $54.5 billion set by the Rudd Government during the depths of the Global Financial Crisis in 2009-10.
During the COVID-19 Pandemic, Treasurer Frydenberg has made two ‘Economic Statements’, the first during the height of the first COVID-19 wave, and the second statement on 23 July, only days before the COVID-19 second wave hit Melbourne.
A deficit of such scale is likely to the dismay of the Treasurer, who stated that former British Prime Minister, the Hon Margaret Thatcher MP, and former US President Ronald Reagan would inspire the government’s economic recovery plans.
Apart from JobKeeper and JobSeeker, the deficit will be exacerbated further as a result of a range of new spending measures, including the rumoured early implementation of the second stage of the Government’s already legislated personal income tax cuts.
Furthermore, the $680 million HomeBuilder program, which ends on December 31, is being considered for an extension over fears the employment-heavy construction sector will start to run out of new work by the middle of next year.
The Morrison government has also expedited more than $10 billion in infrastructure projects which were announced in the 2019-20 budget. It is expected that further spending commitments will mirror the Government’s key priority, providing a platform for people to return to work. Regardless of speculation on spending, the Treasurer’s budget decisions will be shaped by his heavily Victorian focused economic team.
This includes Assistant Treasurer, the Hon Michael Sukkar MP, Assistant Minister for Superannuation, Financial Services and Financial Technology, Senator the Hon Jane Hume, and Health Minister, the Hon Greg Hunt MP.
During the pandemic, Treasurer Frydenberg has been a trusted advisor to the Prime Minister and as the most senior Victorian Liberal, has drawn on his colleague’s ideas and experience in crafting Australia’s road to recovery.