Simon Birmingham warns that low interest rates cannot be taken for granted and that governments should only spend what is necessary.
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In his first speech of the year, Australia's finance minister will say interest rates are so low at the moment, the servicing of government debt has been getting cheaper even as it has got larger.
"Current low interest rates will help us to once again set a pathway towards budget repair as and when economic circumstances allow," Senator Birmingham will tell the Australia-Israel Chamber of Commerce on Friday.
"This is important to consider because we cannot assume that such low interest rates will always be there."
He said the pandemic necessitated a dramatic shift in the government's budget strategy over the past 12 months.
"But the fact remains that governments should only spend what is necessary," he says.
He says Australians should want the country and its balance sheet to be as capable of responding to the next crisis as it has with this one.
The government's emergency interventions to get Australia's economy through the pandemic were always "temporary, targeted and proportionate".
He says 90 per cent of Australians who lost their jobs or saw their working hours reduce to zero as a result of COVID-19 are now back at work.
"But not every job has or can be saved, nor will every business be saved or be able to stay as it was," he says.
"A disruption the size of COVID will unquestionably leave permanent changes to the way people travel, do business and live."
But he expects businesses will again successfully adjust as they have during previous disruptions.
Even so, businesses and households will still enter the next stages of the economic recovery with significant assistance, noting the government's tax reforms have put billions of dollars back in the hands of taxpayers.
"Only a strong economy with strong businesses will give Australians the jobs we want them to have and generate the taxes to fund the services we want to provide," Senator Birmingham says.
He insists there are employment opportunities right across the economy and beyond the agricultural industry, which has been grappling with getting Australians to fill jobs.
"It has been well publicised that other industries are also struggling to find workers," he says.
Australian Associated Press
