According to the latest International Monetary Fund data, Australia’s budget deficit and level of public debt are set to reach record highs this year.  The pandemic-induced national budget deficit for calendar 2021 will be 10.4 per cent of GDP, significantly higher than last year’s deficit of 9.9 per cent.

Budget deficits, the difference between government revenue and expenditure, attract attention because they signify a government’s annual borrowing needs, with Australia’s deficit predicted by the IMF to stay higher for longer into the future than for the advanced economy group on average.   

Canada, Denmark, Norway, Portugal, Singapore, Sweden and Switzerland, for instance, are expected to have balanced their budgets by 2025, though Australia by then will still be running a deficit of over 3 per...