(Image: Private Media)

The Morrison government has committed Australia to an era of big government stretching into the 2030s, with a long-term rise in spending in key areas and a significantly slower reduction in the budget deficit than previously planned.

The government will bank savings from a significantly faster economic recovery this financial year, pulling the deficit down from nearly $200 billion in December’s Mid-Year Economic and Fiscal Outlook (MYEFO) to $161 billion. But the increase in government spending will begin next year: the forecast deficit for 2021-22 is barely changed at $106.6 billion, compared to $108.5 billion in MYEFO, while the deficits for 2022-23 and 2023-24 will actually increase above even the levels forecast in last year’s budget.

To illustrate how radically the government plans to pump up spending from next year, in MYEFO the government forecast it would spend $567 billion in 2021-22, $571 billion in 2022-23 and $592 billion in 2023-24.