Josh Frydenberg has warned Australians should brace for “eye-watering” national debts when the latest budget numbers are released.
The Treasurer will hand down the economic and fiscal update, which will take into account the impact of the coronavirus, on Thursday.
He admits the country will remain in deficit for some years to come.
“You’re going to see eye-watering numbers around debt and deficit, numbers that Australians have never seen before,” Mr Frydenberg told Nine on Wednesday.
“That’s the harsh reality of this pandemic; the coronavirus has required the government to spend unprecedented amounts of money to support people in need.
“We’ve also taken a big hit on the revenue side because obviously businesses are not making the profits they were, people are not in jobs in the same numbers they were.”
Ahead of the economic update, the government announced an extension of coronavirus job support payments.
JobKeeper wage subsidies will be extended until March but the amount will be reduced in two stages and eligibility will be tightened.
A temporary $550 boost to the fortnightly dole payment will drop to $250 at the end of September until the end of the year.
That will put the base rate at about $815 a fortnight but recipients will be able to earn $300 without affecting their payment.
From next month, people will be required to look for work and penalised if they refuse.
But Mr Frydenberg concedes not everyone will find a job.
“That’s why the unemployment rate will be elevated for some time and that will be reflected in the forecasts from Treasury tomorrow,” he said.
“There are jobs out there, and what we want to do is give people the best chance of finding those jobs.”
The government is expected to reveal the permanent JobSeeker rate in the October 6 2020/21 budget.
The Prime Minister has indicated it will likely be more than the pre-pandemic level of $565 a fortnight, when it was known as Newstart.