Mr Morrison said the government was not “reconsidering franking credits and these sort of things” but added budget pressures were being taken into account as the fiscal response to the virus was being put together.
“We are very conscious of the size of these commitments and what can be done,” he said. “That is why I said the other day there will be some who will think it is too much and some who think it is too little.
“There is an intensity of expenditure during this period and then we have to get back to what it was like before and then we have to deal with the burden that will be carried out of this period of time.”
The chief designer of Labor’s franking credit policy, Chris Bowen, said arguments about how to pay for more than $200 billion in stimulus and survival packages were not an immediate priority.
“We are focused on the coronavirus crisis at the moment; all matters about other revenue measures are a matter for another day,” he said.
Pressed on whether the senior public service and cabinet members including himself should follow the lead of business owners and take a pay cut, Mr Morrison said a freeze on pay increases had already been put in place.
His comments came after Commonwealth Bank economists said the budget was likely to show a deficit of $72 billion, or 3.7 per cent of GDP, this financial year. It would be the worst deficit since 2009-10 in the depths of the global financial crisis.
As recently as December, the government was forecasting a $5 billion surplus.
For 2020-21, the bank is tipping a deficit of $155 billion, or 8.1 per cent of GDP, which would be the worst deficit since modern budgeting records started in 1970-71.
CBA senior economist Gareth Aird said the budget was being hit by both government spending, aimed at supporting the economy, and a collapse in tax revenues. Revenue for 2020-21 was likely to be $35 billion below government forecasts.
But Deloitte Access Economics partner Chris Richardson said the debt was an investment in people’s livelihoods at a very low cost.
He said with global interest rates at record lows, the ongoing annual interest bill for the government’s support packages was about $1.6 billion a year in a budget of more than $450 billion.
“Don’t be scared of the debt – its costs aren’t that bad. And chances are that taking on this debt will be a great investment in Australian livelihoods,” he said.
The government’s debt agency, the Australian Office of Financial Management, is expected on Friday to outline just how much debt it is going to sell in coming months.
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Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.
Eryk Bagshaw is an economics correspondent for The Sydney Morning Herald and The Age, based at Parliament House in Canberra