Federal budget delayed to October

The government was due to deliver the budget on 12 May, but that has now been postponed because of the coronavirus pandemic.

“The idea that you can actually put together any sort of forecast around the economy at this time is simply not sensible,” Mr Morrison said.

“The national cabinet agreed that putting budgets together at this time, with the great uncertainty that exists, is not something that any Commonwealth or state government should be doing.”

Treasurer Josh Frydenberg said the uncertainty caused by COVID-19 had rendered it virtually impossible to craft a budget.

“Forecasting for budgets is difficult at the best of times, let alone when we’re in the midst of a global pandemic,” Mr Frydenberg said.

“It’s important that we are able to deliver a budget at a time where there is more certainty about the economic environment.”

Mr Frydenberg was due to deliver a budget surplus in May, but has now conceded that it will not materialise after a combination of events, including the drought, bushfires, floods and the current coronavirus pandemic.

The Tax Institute’s senior tax counsel, Professor Robert Deutsch, welcomed the government’s move, despite noting that it would leave advisers with more uncertainty over certain tax measures, including Division 7A.

“Budget night is traditionally one of the biggest nights in the calendar for tax professionals,” Professor Deutsch said.

“We know that members have been waiting for announcements about measures that remain uncertain; for example, what further changes might be announced in relation to Division 7A.

“However, given the circumstances we are in, clearly priorities need to change. There are much more immediate matters to consider, such as the health and wellbeing of everyone. Everyone is feeling pressure and anxiety from the unknown consequences that are flowing from the coronavirus crisis.”