Scott Morrison has announced a $2 billion bushfire recovery fund, which will assist in rebuilding devastated areas over the next two years

• Prime Minister Scott Morrison has promised the government will invest at least $2 billion over for a "recovery fund" to assist with recovery after a severe bushfire season.

• The prime minister said a new agency, headed by former Australian Federal Police boss Andrew Colvin, will manage the investment, focusing on assistance to local governments, farmers and small businesses affected by the bushfires.

• Morrison also said "further funds will be provided" if required above and beyond the $2 billion.

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Prime Minister Scott Morrison has announced the establishment of a $2 billion National Bushfire Recovery Fund, which will assist in rebuilding efforts over the next two years following the current nightmare fire season.

"Today we agreed that we would support the National Bushfire Recovery Agency by establishing a National Bushfire Recovery Fund," Morrison said at a press conference.

"The Commonwealth is committing an additional $2 billion over the next two calendar years, starting right now, to support all of the efforts of a recovery right across the country."

The $2 billion investment – which the prime minister said could increase if "further funds are required" – will go towards efforts to rebuild communities shattered by bushfires, with support focusing on local governments, farmers and primary producers, and small business.

"This money will go towards supporting small businesses, supporting local councils, providing mental health support, investment in social and economic infrastructure, as well as providing environmental protection and protection for native wildlife, which has been so badly hit by these tragic fires," Morrison said.

"It is important to understand that this money will help rebuild lives and restore livelihoods. This money will help communities get back on their feet after these devastating fires."

The investment will be managed by the National Bushfire Recovery Agency, which is to be headed by former Australian Federal Police boss Andrew Colvin.

To help with the disbursement of the money, the prime minister announced the rollout of 20 Service Australia "pop-ups" in affected areas, which will work to "ensure people know what resources and payments are available".

"We have taken a number of decisions to streamline those payments to make sure cash gets into people 's hands as soon as possible," Morrison said.

The prime minister said he expected state governments would work to rebuild damaged infrastructure like bridges, roads and schools, and suggested the federal government could support those projects.

Additionally, Morrison announced a a suspension of recovery and mutual obligation requirements – like Centrelink debt payments – for two months for those in fire-affected communities.

Treasurer Josh Frydenberg confirmed this two-month suspension also applies to tax affairs.

"The ATO has also taken steps to ensure that people have a two-month deferral with the lodgement of payments and other obligations for those in the fire-affected areas," Frydenberg told reporters at the press conference. "People should not be concerned about their tax affairs at this time."

The government's announcement comes amid analysis suggesting the bushfires are causing significant damage to the Australian economy – and, therefore, the government's long-promised surplus. AMP Capital chief economist Shane Oliver estimated the fires will wipe off 0.25% to 1% of the Australia's GDP growth this year.

Responding to a question from a journalist, Morrison said the surplus was not his government's primary focus at this time.

"[The] surplus is of no focus for me – what matters to me is the human cost, and meeting whatever cost we need to meet," he said.

Returning the federal budget to surplus has been key to Coalition messaging for nearly a decade at this point. The prime minister, responding to further questions on the economic impact of the new fund, said his government's economic management had led to a "position of strength" which enabled the $2 billion investment.