Finance Minister Mathias Cormann is set to QUIT politics altogether after the budget – just as Australia plunges into a deep recession
- Finance Minister Mathian Cormann is set to resign from politics later this year
- A senior government source said he would step down after the October budget
- He is reportedly considering a job in the private sector in hometown of Perth
Finance Minister Matthias Cormann will reportedly quit after the October 6 budget.
A senior government source told the AFR that Senator Cormann plans to leave politics before the end of this year.
He is reportedly considering a job with the Organisation for Economic Co-operation and Development or in the private sector.
Finance Minister Matthias Cormann (pictured) will reportedly quit after the October 6 budget
A senior government source said that Senator Cormann plans to leave politics before the end of this year
Mr Cormann (centre in blue) is considered a safe pair of hands for managing the nation's finances
The 49-year-old, who was born in Belgium and moved to Australia aged 25, entered the Senate in 2007 and has been part of the cabinet since 2013.
He is regarded as a safe pair on hands when it comes to managing the nation's finances and will be missed as Australia faces a deep recession.
The federal government usually delivers its annual budget in May, but the financial report was delayed this year because of the coronavirus.
The government will provide a budget update on July 23 that will outline the coalition's plans for JobSeeker and JobKeeper and other economic issues.
Since March, the federal government has spent $153.7billion on three separate stimulus packages.
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Deloitte Access Economics is also forecasting a $143billion budget deficit for 2019-20 that would comprise 7.1 per cent of gross domestic product, the largest since World War II.
The Parliamentary Budgetary Office is also forecasting government debt of close to $1trillion by the end of the decade.
Despite that, the Grattan Institute wants the commonwealth government to spend another $70billion to $90billion on extra economic stimulus, including revamping and extending JobKeeper.
Prime Minister Scott Morrison has cautioned against making the dole too generous, even though Australia's unemployment rate in May rose to a 19-year high of 7.1 per cent
Since April 27, the JobSeeker benefit has been temporarily doubled from the old Newstart rate of $565.70 a fortnight to $1,115.70, with a $550 coronavirus supplement. Pictured is a Centrelink queue in March
The Reserve Bank is forecasting a ten per cent plunge in Australia's economic output in the first half of 2020, or a level equivalent to four-and-a-half years of gross domestic product, as a result of the coronavirus business shutdowns.
Treasurer Josh Frydenberg in June acknowledged Australia was most likely already in recession, a situation that hasn't occurred since 1991.
With the economy set to suffer from the sharpest contraction since the 1930s Great Depression, the Grattan Institute is calling on the government to scrap plans for compulsory employer superannuation contributions to be increased from 9.5 per cent now to 12 per cent by July 2025.
'Increasing compulsory superannuation would further dampen spending,' it said.
'Legislated plans to increase the rate of compulsory superannuation contributions incrementally to 12 per cent of wages between 2021 and July 2025 would also exacerbate the economic problems caused by COVID-19, and should be abandoned.'
Australia's unemployment rate surged to a 19-year high of 7.1 per cent in May, as 227,700 people either lost their job or gave up looking for one.
The Reserve Bank is bracing for a ten per cent jobless rate by June, a level unseen since April 1994.
Treasury is expecting unemployment to peak at eight per cent in September - a rate that hasn't been experienced since July 1998.
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