Flat White

We have a surplus, but it’s just been deployed against bushfire and coronavirus debt and deficit

5 March 2020

6:00 PM

5 March 2020

6:00 PM

Perhaps the best way to look at the budgetary effects of coronavirus is not that it has helped wipe out the surplus, but that the surplus has been spent on combating it. Surpluses are, in part, buffers against unexpected events — those things that muck up political plans — and in this case, it is just a matter of timing. 

Had the coronavirus erupted in, say July, the budget surplus in the piggybank would have been raided to pay for the measures taken. It is perhaps a half glass full view, as opposed to the glass half empty view; and entirely rational, I would suggest.  

If the surplus wasn’t available, as a sort of line of credit, and the budget was at break-even, the virus (and the drought and the bushfires) would have forced us into a budget deficit.  

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