ANZ: Delta To Blow Out Australia's Fiscal Deficit

ANZ note that "the impact on the economy of lockdowns and additional fiscal support is likely to increase the federal fiscal deficit in 2021-22 from A$106.6bn to somewhere around A$130-140bn."

• "A key part of the expected increase in the deficit is from the much-needed COVID-related support, which could end up costing A$15bn if lockdowns continue well into Q4 - which is what we expect, for NSW at least."
• "Included in our deficit estimate is an anticipated increase in further discretionary fiscal policy from the Government over the coming months and at the Mid-Year Economic and Fiscal Outlook (MYEFO) to help boost the economic recovery. We envisage another A$3-5bn of new discretionary policy spending in 2021-22 (i.e. in addition to the demand driven COVID support payments).
• "The increase in the deficit will likely require the AOFM to up its debt issuance task at the time of the MYEFO."