In an economic statement to parliament to be delivered on Tuesday, the Treasurer will outline a huge economic hit if a new outbreak prompts a stop-start approach to the economy reopening.
But as he marks the day he had planned to deliver the first budget surplus in over a decade, there’s one number the Treasurer won’t be revealing: Australia’s budget deficit.
Deloitte Access Economics has forecast the COVID-19 spend-a-thon has transformed the promised “back in black” budget from a forecast $5 billion surplus to a $140 billion budget deficit.
But Mr Frydenberg will refuse to reveal the current figure, preferring to wait until later in the year to outline the damage.
However, he will warn of the risk of a second wave of infections.
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Mr Frydenberg will predict that lifting the restrictions could help to restore 850,000 jobs to the economy.
“Improvements in the economy are only possible if Australians follow the health advice and continue to practice physical distancing and good hand hygiene,’’ he says.
“If our biggest state, NSW, had to wind back its restrictions to those in place before the 8 May National Cabinet meeting, it would cost it’s economy around $1.4 billion per week.
“Treasury estimate as a result of easing the restrictions in line with stages 1, 2 and 3, GDP will increase by $9.4 billion each month.”
It’s advice that was echoed by Chief Medical Officer Brendan Murphy on Monday night.
Asked what keeps him awake at night he admitted it was a fresh outbreak after restrictions are lifted.
“Oh, a large second wave. That is the most worrying thing of all,’’ he said.
“We’ve seen that this virus is incredibly infectious. We saw 35 people from one wedding in the early phases. It can spread really quickly.
“If people aren’t careful and we have lots of pockets of outbreaks and widespread community transmission, you know, thousands of more cases, that – that is what worries me most of all.”
Mr Frydenberg will also highlight the huge generational cost of the $200 billion in COVID-19 measures today.
The Prime Minister left the door open to “adjusting” the JobKeeper allowance on Monday after a news.com.au report confirming Treasury officials are drawing up a range of options to reform the scheme.
Options include redesigning the payment to cover 80 per cent of wage costs only or trimming the value of the $1500 allowance, but it could also be extended beyond September 27 for a smaller group of companies hardest hit by the shutdowns.
Liberals MPs are expected to push for further debate on phasing out the JobKeeper scheme during today’s party room meeting.
Mr Morrison stressed that as the economy improved the government will be monitoring the situation closely.
“The thing that matters is getting Australians back into work. The thing that matters is getting Australian businesses back open because when that happens, there will be no need for those levels of income support,’’ Mr Morrison said.
“If people are in jobs, they don’t need income support and that’s my task.”
Opposition treasury spokesman Jim Chalmers will use his own address to parliament to urge the Morrison government to outline its plan for JobKeeper and Jobseeker.
“Delaying a Budget is forgivable, delaying a plan is not,’’ he says.
“This isn’t just a Budget day without a budget but a government without a plan for what comes next.”
Samantha Maiden is news.com.au’s national political editor | @samanthamaiden