Virus hits budget as new case numbers drop

The budget black hole created by the coronavirus pandemic has been revealed as welfare recipients prepare for less support.

Treasurer Josh Frydenberg on Friday said the federal budget deficit hit $85.3 billion in 2019/20 as the government wrestled with the initial impact of the virus.

He said Australia had approached the pandemic from a position of economic strength, having in December forecast a $5 billion surplus.

“Yes, the hole in the Australian economy is significant. Yes, the road back will be long, bumpy and hard,” Mr Frydenberg told reporters in Canberra.

The figure sets the base for this year’s budget to be delivered on October 6, which will focus on measures to boost aggregate demand and business investment.

Mr Frydenberg defended the timing of changes to JobSeeker, with recipients to receive less support from Friday.

The coronavirus supplement has shrunk from $550 a fortnight to $250 but the treasurer argues people can now earn more without having payments docked.

JobKeeper will also face changes from Monday, when the rate will decrease and be split into two-tiers for full time and part time workers.

Prime Minister Scott Morrison will provide his insights into the pandemic and road ahead when he addresses the National Press Club in Canberra on October 1.

COVID-19 infection rates continue to fall across Australia, prompting NSW and Queensland to further ease restrictions.

Victoria had 14 new cases on Friday and eight deaths.

However Premier Daniel Andrews has tempered hopes of wholesale changes to Melbourne’s road map out of lockdown.

Mr Andrews said Sunday would not be a day for major steps despite some easing of restrictions on gatherings, workplaces and schools.

But there are hopes some businesses and personal freedoms may be restored ahead of schedule, with the next round of changes not due until October 26.

Mr Andrews is due to appear at Victoria’s hotel quarantine inquiry on Friday, where he will be grilled over the decision to use private security guards in the bungled system.

NSW will allow up to 20 people in bridal parties to dance at weddings, extending permission from just the bride and groom.

A range of school activities including camps, excursions and formals are also set to return from next month.

The latest relaxations come after three consecutive days without community transmission of the virus, while there was just one new case in hotel quarantine.

Queensland has gone two weeks without the disease spreading through the community and now has only five active cases.

As a result, the government is giving the green light to house parties this weekend with the 10-person gathering limit now lifted to 30 across Brisbane, Logan and Ipswich.

Those areas are also allowed to restart visits to nursing homes and hospitals.

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