Scott Morrison is set to fast-track assistance to pensioners and small businesses to beat the coronavirus threat, while pleading with  employers to keep staff on the payroll as the economy takes a hammering.

The Prime Minister will urge business leaders and voters to keep the faith in a keynote address in Sydney on Tuesday, outlining the seven principles that will govern the economic stimulus package to be announced this week.

It’s expected to include changes to the deeming rate to help pensioners hit by low interest rates on term deposits, and more assistance for small business operators.

Existing mechanisms including the tax and transfer system will be used to deliver one-off stimulus payments rather than permanent changes, such as increasing the Newstart rate.

• Read more: Treasurer calls for calm 

But the PM will all but concede in the speech that the promised 2020 budget surplus is a casualty of the virus outbreak.

“Last year the budget was restored to balance. And now here we are. This is what I was talking about,” Mr Morrison will say.

“We confront today a new, complex, hydra-headed and rapidly-evolving challenge – the coronavirus, COVID-19.

“While not immune, so far we have been able to get ahead of this.

“To stay ahead, we must work together and continue to take decisive and timely action.

“This is one of those national interest moments.”

• Read more: Permanent Newstart increase ruled out

Mr Morrison said the stimulus measures to be announced will be proportionate, scaleable and targeted, and aligned with other arms of policy.

The temporary measures will use existing delivery mechanisms, and are expected to lift productivity.

In his speech, Mr Morrison will also urge businesses to pay invoices promptly to help small business operators and not lay off staff.

“We need you to support your workers, by keeping them employed,” he will say.

“Hold on to your people. You will need them on the other side.

“Wherever possible, support them – whether full-time, part-time or casual – including with paid leave if they need to take time off due to the virus.

“We need you to support your small business suppliers by paying them promptly.  Pay your suppliers not just in time, but ahead of time, especially now.

“You want to know what you can do to keep Australians in jobs and Australian businesses in business?

“If you are a large business, go back to the office today and pay your supplier invoices and commit to pay them even faster for the next six months.”

It’s Budget Day.
Tonight the Liberal National Federal Government will be announcing the first Budget surplus in 12 years. #Budget2019 #BuildingOurEconomy pic.twitter.com/d91UWA91zU

— LNP – Liberal National Party (@LNPQLD) April 1, 2019

Back in black

Meanwhile, the Liberal Party has quietly removed from sale ‘back in black’ coffee cups trumpeting the first budget surplus in years as hopes fade that the election promise can be honoured.

After spending the election boasting the budget was ‘back on track’, the combined impact of the coronavirus and the bushfires is likely to wipe out the modest budget surplus.

Labor’s treasury spokesman Jim Chalmers said the budget was clearly in trouble before the coronavirus emerged.

“Before the virus hit we had slowing quarterly growth, annual growth was well below average [and] business investment went backwards for three quarters in a row,” Dr Chalmers said.

“We’ve got stagnant wages, very high household debt and issues with consumption and productivity.

Every Australian needs the Liberals to do a better job dealing with the challenges posed by the Coronavirus than they have done managing the economy in recent years #auspol #ausecon pic.twitter.com/iaAkXy6eWh

— Jim Chalmers MP (@JEChalmers) March 9, 2020

“Australia approaches these challenges from the coronavirus from a position of relative weakness, not strength because of a long period of inaction and incompetence from Scott Morrison and Josh Frydenberg.

“Australia needs this government to do a better job managing these challenges than they have done managing the economy in recent years.”