TREASURER: Australia is $10 billion worse off than expected
AUSTRALIA's budget deficit may be "monumental" but it had to be done to prevent even worse closures and job losses, according to local business leaders.
Coffs Harbour Chamber of Commerce president Martin Wells said while the deficit could cause economic pain in the future, the stimulus measures had also saved many from ruin.
The Federal Treasurer on Tuesday outlined what he described as Australia's "sobering" economic future, with an underlying cash deficit in March of $22.4 billion - which is $9.9 billion worse than expected.
Josh Frydenburg said government debt had jumped more than $50 billion to $618 billion thanks to COVID-19 related spending which could take many years to repay.
The unemployment rate is expected to reach around 10 per cent, or 1.4 million unemployed, in the June quarter - a five percentage point increase over three months.
But lifting restrictions over three stages could restore 850,000 jobs and inject $9.4billion back to GDP per month, according to Treasury estimates.
The chamber's Mr Wells said without the Federal Government's pandemic stimulus packages, Australia would have been in a worse position.
"This deficit is going to be monumental and it could take generations to pay off," said Mr Wells.
"But (without the stimulus measures) it would have been completely crippling for the national and local economies and for families and the unemployment lines because a lot more businesses would have closed and people would have lost their jobs.
"The budget repair is going to be a long process; we might need policies to safely bring it back to balance over however many years.
"We are naïve to think there won't be some pain to bring that back to balance.
"But I keep reminding that if we didn't have the deficit, there would have been more pain and mental health problems and suicides."
Mr Wells said reopening the economy would require a balancing act between winding back stimulus measures such as the JobKeeper payment and not leaving businesses to sink.
"I encourage people to support local businesses to help keep them open and keep local jobs," he said.
"We will see businesses start to reopen and whether you go into the store or shop online, we should support them.
"There are still a lot of businesses that will struggle for many, many weeks to come."