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The horrifying chart shows how Australia’s debt will rise to $ 213 BILLION by 2021 after the COVID-19 crisis

The horrifying chart shows how debt will reach $ 213 BILLION by 2021 as the Reserve Bank backs the budget outbreak to prevent Australia from experiencing an economic disaster

  • Australia appears to have revealed the largest budget deficit in recent decades
  • The Coronavirus pandemic has seen the country’s debt rise to about $ 85 billion
  • Economists predict a $ 200 billion deficit for the next fiscal year

Thanks to the coronavirus pandemic, Australia can be plunged into $ 213 billion in debt in just 12 months.

The government had hoped to deliver the first surplus since 2007-2008, foreseeing a $ 5 billion surplus for 2019-20 and a $ 6.1 billion surplus for the current fiscal year.

But a horrifying graph shows that the government’s balance sheet is moving in the opposite direction.

The country’s debt has risen thanks to a decline in revenues and increasing expenditure, and economists now forecast a deficit of more than $ 200 billion for fiscal year 2021/22.

A record deficit of more than $ 85 billion is also expected for the current fiscal year.

The Reserve Bank has supported the plans of the Morrison government to increase debt.

The country's debt has risen thanks to the coronavirus pandemic, and economists are now predicting a deficit of more than $ 200 billion for the next fiscal year - that's -11% of GDP

The country’s debt has risen thanks to the coronavirus pandemic, and economists are now predicting a deficit of more than $ 200 billion for the next fiscal year – that’s -11% of GDP

Australians have been warned to brace themselves for 'dazzling' national debt when the latest budget figures are released (Pictured: Prime Minister's businessmen meet Monday)

Australians have been warned to brace themselves for 'dazzling' national debt when the latest budget figures are released (Pictured: Prime Minister's businessmen meet Monday)

Australians have been warned to brace themselves for ‘dazzling’ national debt when the latest budget figures are released (Pictured: Prime Minister’s businessmen meet Monday)

On Tuesday, Scott Morrison announced that the JobSeeker payment, which currently serves 3.5 million Australians, will be reduced in stages as the economy recovers from the corona virus blockage (photo: dozens of people queuing outside of Centrelink in Melbourne in April)

On Tuesday, Scott Morrison announced that the payment for JobSeeker, which currently serves 3.5 million Australians, will be reduced in stages as the economy recovers from the coronavirus blockage (photo: dozens of people queuing outside Centrelink in April in Melbourne)

On Tuesday, Scott Morrison announced that the JobSeeker payment, which currently serves 3.5 million Australians, will be reduced in stages as the economy recovers from the corona virus blockage (photo: dozens of people queuing outside of Centrelink in Melbourne in April)

Bank Governor Philip Lowe said the government should use its balance sheet to ease the severity of the recession.

“The biggest policy mistake currently being made is withdrawing aid too early,” he told the Australian Financial Review.

Dr. Lowe said the government is in a good position to continue borrowing and providing fiscal support for a sustainable economic recovery.

“For a country that has become accustomed to low budget deficits and low government debt, that is a significant change.

“But it’s a change that’s completely manageable and affordable, and that’s the right thing to do.”

Prime Minister Scott Morrison and Treasurer Josh Frydenberg will inform the nation about the budgetary position on Thursday.

Mr Frydenberg has admitted that the country will be in deficit for several more years.

“You will see eye-catching figures on debt and deficits, figures that Australians have never seen before,” Frydenberg told Nine on Wednesday.

Cafés and restaurants were forced to close or offer takeaway only when the coronavirus crisis escalated in March (Pictured: a closed cafe in Melbourne on July 9)

Cafés and restaurants were forced to close or offer takeaway only when the coronavirus crisis escalated in March (Pictured: a closed cafe in Melbourne on July 9)

Cafés and restaurants were forced to close or offer takeaway only when the coronavirus crisis escalated in March (Pictured: a closed cafe in Melbourne on July 9)

Prime Minister Scott Morrison (pictured Tuesday) has dampened expectations of large spending commitments on Thursday. He said it was “about reconciling the books”

“That is the harsh reality of this pandemic. The coronavirus has required the government to spend unprecedented amounts to support those in need.

Unemployment in June amid COVID-19

The unemployment rate in Australia rose from a 19-year high from 7.1 percent in May to 7.4 percent in June – the highest since November 1998

The unemployment rate rose from 923,000 to a record high of 992,300

Nearly a million people were unemployed for the first time – more than 960,200 records in December 1992

Unemployment increased, although 210,800 more people worked as COVID-19 closures declined

This was because the participation rate rose from 62.7 percent to 64 percent as more people looked for work

Source: Australian labor force data for June

“We also made a big hit on the revenue side, because obviously companies don’t make the profit they were, people don’t have the same jobs as they were.”

Prior to the economic update, the government announced an extension of coronavirus job support payments.

The $ 20.4 billion extension on the JobKeeper and JobSeeker scheme is worth about 1 percent of GDP.

Payment would expire on September 27, but will instead decrease from $ 1,500 to $ 1,200 every two weeks.

A lower rate of $ 750 every two weeks goes to people who worked less than 20 hours a week in February, before the corona virus hit.

The two-tier system was introduced because one in four casuals earn more on JobKeeper than when they worked.

As of January 4, payments will be reduced to $ 1,000 for a fortnight for full-time staff and $ 650 for a fortnight for people who have worked less than 20 hours.

Fewer companies are eligible for JobKeeper because they must continue to demonstrate a 30 percent drop in sales compared to the pre-corona virus period.

Many will not reach this threshold because things have risen since the closure ended.

Payment is still expected from January, against 3.5 million now.

How will support payments change from September?

JOBKEEPER

* The biweekly wage subsidy of $ 1,500 runs through September 27

* From late September to January, JobKeeper is reduced to $ 1,200 for full-time employees and $ 750 for people working 20 hours or less

* From January to March, the full-time rate is $ 1,000 and the part-time reduction is reduced to $ 650

* Companies that turn less than $ 1 billion must qualify for the program again in both phases by showing a 30 percent drop in sales.

* Businesses with revenues in excess of $ 1 billion must demonstrate a 50 percent decline

JOBSEEKING

* The increased unemployment benefit will remain at $ 1100 for two weeks until September 27

* From that date to the end of the year, the $ 550 coronavirus supplement will be reduced by $ 300 to pay the total fortnightly payment of $ 800

* People can earn up to $ 300 without having their payment reduced

* The rules for mutual obligations requiring people to look for four jobs per month will be restarted on August 4

* Penalties for people who refuse a job offer will be reintroduced

* Job search requirements will increase in September, when the asset test returns

* The fixed JobSeeker rate that will take effect from January next year will be announced in the October 6 budget.

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