The federal government is cautioning its state counterparts against rushing to close borders again, in light of a new COVID-19 cluster in Sydney.

The national economy has rebounded faster than predicted: A deficit of $214 billion was predicted for this financial year, but the mid-year economic and fiscal outlook forecasts the deficit to fall to $198 billion.

Trade and Finance Minister Simon Birmingham told Luke Grant the outlook has “changed in the right direction” as more Australians return to work than expected.

The MYEFO factored in the worsening trade relationship with China, he said, but not the reintroduction of state border closures across the country.

Resumption of interstate travel is supporting “fragile” jobs, the Minister warned.

“The only week in recent months in which consumer confidence went backwards … was the week in which South Australia faced its cluster … and where states were variously closing their border.

“I would urge people, including the different state premiers, … to recognise that what Gladys Berejiklian and the NSW government have done … is world-leading.

“Give it time to work, rather than … risk undermining the returning confidence that we’re seeing.”

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