National Cabinet to meet after coronavirus spending leads to record high debt and deficit
The continuing coronavirus outbreak in Victoria will be a key feature of today’s National Cabinet meeting, when state and territory leaders meet with the Prime Minister to discuss the country’s response to COVID-19.
The group of leaders will also discuss the economic crisis facing the country, one day after the Federal Government unveiled a record budget deficit, and plans for responding to localised outbreaks.
Despite Melbourne and Mitchell Shire being placed into lockdown, Victoria continues to record concerning levels of the virus, with 484 cases — the largest increase since the pandemic began — recorded on Wednesday.
Cluster outbreaks in south-west Sydney, Batemans Bay and the Central Coast in New South Wales also have authorities there on high alert and have seen restrictions tightened in a bid to avoid the spread seen in its southern neighbour.
The leaders will also discuss issues not related to the pandemic, including status updates on Closing The Gap targets and a review of Federal environmental protection laws.
The meeting comes a day after Federal Treasurer Josh Frydenberg announced Australia’s budget deficit hit almost $86 billion last financial year and was expected to grow even further this financial year to more than $184 billion.
The Treasurer will also address the figures today in a speech to the National Press Club, warning Australia cannot take the same approach as it has to other economic threats, due to record low interest rates.
“Unlike past recessions, monetary policy is constrained and will do much less of the heavy lifting,” he is expected to say.
“We don’t have that luxury this time around.
“We also don’t have a strong flow of migrants to support growth. Due to lower net overseas migration, annual population growth is assumed to slow to just 0.6 per cent in 2020-21, the lowest rate since 1916-17.”
The Government delayed handing down this year’s budget until October because of the pandemic and instead delivered an economic and fiscal update, which revealed the full scale of the coronavirus’s impact on the economy.
In its update, the Government said the outbreak in Victoria was a “sobering reminder” of how virulent COVID-19 was and how quickly circumstances anywhere in the country could change.
Mr Frydenberg would not put a date on how long it would take to pay the debt incurred by the pandemic back, but that it would be “a number of years”.
“We can see the mountain ahead and Australia begins the climb,” he said on Tuesday.
“We must remain strong, we must draw strength from our resilience as a nation and a people and we will get through this and we will get through this together.”