January 20, 2020 / 1:19 AM / a month ago

Australian budget surplus in doubt as bushfire funding boosted

SYDNEY (Reuters) - Australia on Monday boosted emergency funding for small businesses hit by bushfires that have ravaged the country for months, as the mounting costs of the disaster cast doubt on the government’s ability to deliver a promised budget surplus.

Burnt bushland on Kangaroo Island, Australia January 19, 2020. REUTERS/Tracey Nearmy

The fires have killed 29 people and millions of animals, destroyed more than 2,500 homes and razed an area roughly a third the size of Germany since September, and scores of fires continued to burn on the east coast despite recent rain.

The Australian Open got under way on schedule in relatively clear air in Melbourne on Monday, after thick bushfire smoke caused havoc with preparations last week and forced one player to retire from qualifying.

“I definitely was concerned, and am ... That is still a concern for pretty much everyone,” seven-times Australian Open champion Serena Williams told reporters.

Budget repair after years of deficits was a key promise ahead of last year’s election but Treasurer Josh Frydenberg sidestepped a question about whether the promised A$5 billion surplus for the year to June 2020 could be delivered.

“I’m not in a position to give a firm answer to that question because the full economic impact is still uncertain ... Our focus is not on the surplus per se,” he told reporters.

The federal government has so far committed A$2 billion ($1.4 billion) for bushfire recovery, and has already trimmed its earlier forecast surplus for 2019-2020 by that amount.

Grants for small businesses affected by the fires would be raised to A$50,000 each, from A$15,000 announced earlier, and interest-free loans up to A$500,000 also would be available, the government said on Monday.

Several days of rain and cooler temperatures have reduced the number of active fires across the country’s densely populated southeast and given authorities an opportunity to focus on the recovery effort.

Violent hailstorms and damaging winds hit parts of New South Wales state including bushfire-affected coastal towns on Monday, but hot and windy conditions are forecast to return to many parts of NSW later in the week.

Here are key events in the bushfire crisis:

*Early on Monday, 90 fires were burning across New South Wales, none above the lowest warning level, and there were 28 emergency warnings in Victoria, including one flash flood warning.

*Firefighters warn that high temperatures and heat will return later this week, creating a return to hazardous conditions.

*The Australian Open tennis tournament began in Melbourne. The city’s air quality was rated as “good”, according to the Air Quality Index, having been “hazardous” less than a week earlier.

*The tennis community has raised more than A$50 million for bushfire relief, according to Tennis Australia.

*The Australian tourism industry estimates the fires which have raged throughout the December-January holiday season have cost it almost A$1 billion.

Reporting by Byron Kaye, Colin Packham and Swati Pandey; Additional reporting by Nick Mulvenney in Melbourne; Editing by Stephen Coates

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