The defence of the budget surplus retreat begins

Prime Minister Scott Morrison in Canberra on Tuesday. Picture: Gary Ramage

Scott Morrison and Josh Frydenberg are prepared like never before to accept a May budget surplus may not be possible.

From the Prime Minister, the Treasurer and Greg Hunt there is a unified message that the “global health crisis” of the coronavirus is the Morrison government’s first priority and the cost of keeping Australians “in the best possible position” in the world to deal with the virus will be counted later.

If that cost, even greater as the IMF downgrades its global growth forecasts further because of the virus, is abandonment of the 2020 budget “surplus” of the Mid-Year Economic and Financial Outlook in December then so be it.

The language and presentation of the latest update on the impact virus was all about prioritising the health of Australians against the health of the budget.

Morrison refused to “speculate” and Frydenberg said the “numbers” were still being done but neither would guarantee a surplus.

Politically the preparation for an economic retreat has begun as Morrison outlines the much wider threat to the economy than just the education and tourism sectors to include all supply lines and building and construction.

But, in leaving the way open for not delivering the much-lauded surplus this year, Morrison is not giving way on the argument that he should have provided cash stimulus to the economy last year.

Morrison argues Australia is so well placed to face the latest crisis of coronavirus as well as the floods and bushfires because he didn’t give in to calls to “splash money around” last year.

It’s possible there will still be a surplus but given the probability there won’t, the defence of the retreat has begun.