Falling tax receipts have punched a $200 billion hole in the federal government’s 2020/21 balance sheet, in the wake of the coronavirus pandemic.
And the coffers are unlikely to recover until more people are in work and households are confident enough to lift spending, according to the budget released on Tuesday.
«2020 has been a year unlike any other in recent history,» Treasury said in the papers.
«Against this backdrop, tax receipts have already fallen significantly» since the December budget update.
«The impact of this shock is expected to be long-lasting with lower tax receipts across both the forward estimates and the medium term.»
The total tax intake is forecast to fall by a cumulative $283.5 billion in the four years to 2023/24, compared to the December budget update.
The slump will begin with a decline of $55.6 billion this year and almost $90 billion next year.
Some of this will be due to the government bringing forward tax cuts in this budget.
But the biggest impact will be from the coronavirus and the health and border restrictions that have followed, which have hurt personal and company tax contributions.
The government is hoping for company tax receipts to get some lift from mining profits and receitas continued high iron ore prices, but the outlook remains uncertain.
«There is considerable uncertainty around the forecasts for company tax,» the budget paper said.
The states and territories will also lose out, with Treasury forecasting GST receipts to fall 0.5 per cent this year before recovering to grow by 5.3 per cent on average out to 2023/24.
The GST pool for 2020/21 is forecast at $59.9 billion, down $600 million at the end of the 2019/20 financial year.
The government’s total revenue, including taxes, had already slumped by almost $25 billion since December to end the 2019/20 year at $486.3 billion.
It’s now forecast to decline to $472.4 billion this year — against outgoings of $670.3 billion — a $200 billion shortfall.
Revenue will fall again to $464.1 billion in 2021/22, before jumping up by $27.3 billion in 2022/23 to end at $538.1 billion in 2023/24.
Overall, the government expects to cumulatively reap almost $2 trillion in total revenue by the end of the forward estimates.
