Anthony Albanese’s decision to restore the $750 pandemic leave payment before a spike in COVID-19 omicron cases should be offset by budget savings, says economist Chris Richardson, as falling iron ore prices and growing debt interest costs add further pressure to the bottom line.

The prime minister insisted the decision to bring back the payment for casuals and workers without sick pay – which came amid a backlash from businesses and premiers – was based on health advice and not a backflip, despite the government previously indicating it was unaffordable.