Treasurer Josh Frydenberg has warned he is set to reveal high levels of national debt when the latest budget figures are released today.
The government will provide a mini-budget update highlighting key economic areas that have been struck by the coronavirus pandemic.
The unemployment rate is currently at 7.4 per cent, but officials are worried about the effective unemployment rate which takes into account people who have left the workforce or are still employed but are not working any hours. That rate is approximately 11.3 per cent.
Economists from N-A-B and Westpac are tipping the deficit for 2020-2021 to be $230-240 billion dollars.
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Mr Frydenberg says the government is doing everything it can but states and territories could be doing more.
"Every dollar we spend today is borrowed money. The Commonwealth is increasing its debt very substantially. You will see those eye-watering numbers tomorrow. We are increasing that debt very substantially because the public needs it. The Commonwealth needs the states as well to be side by side. Now Victoria has already made some announcements and we welcome that, but any more that they can provide to those in need, including those without a job, is of course welcome."
Labor is accusing the federal government of economic mismanagement even before COVID-19, as Australians prepare to learn the state of the economy.
Labor's Treasury spokesman Jim Chalmers says two-thirds of the debt was accumulated by the government before the pandemic.
Although Mr Frydenberg is not expected to announce new policies today, Mr Chalmers says there needs to be a comprehensive plan for jobs and economic recovery.
"The government needs to acknowledge that they weren't doing a good job leading up to this crisis. There has been some necessary spending to respond to the virus, and we've been supportive and responsible and constructive about that. But it's time for the government to acknowledge that the last few months of spending doesn't explain the last seven years of failures in the budget."
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