On Tuesday, the Sydney Morning Heraldclaimed Peter Costello was sitting on a $10 billion surplus. The treasurer played coy about it on LatelineWednesday night.

the OECD claimed John Howard and Peter Costello have markedly increased
the tax burden on Australians over the past eight years, in striking
contrast to the sustained period of tax relief enjoyed by taxpayers in
most nations around the world -– PM bucks world with tax hikes. Yet the treasurer declared the hope of tax cuts is fading – here. Is the Government saving up the money for the recession we’re going to have to have? Look at some of the evidence.

Yesterday BIS Shrapnel chief economist Frank Gelber
warned a business forecasting conference of a wage explosion. The
morning employment figures backed this claim. He also claimed interest
rates will continue to rise and warned of inflationary pressures. Even
the PM
said he expects more negative economic figures will be released in the
months and years ahead – but he’s urging people to keep a sense of
perspective about the state of the economy. Yesterday, he said the jobs
figures confirmed the underlying strength of the economy:

“There’s no point in pretending that you can preside over
an economy for nine years or more and expect that every single
statistic is going to be positive. It never can be and it never will be.

“There’ll be other statistics in the months and years ahead that will be more negative than we would like.”

Costello claimed the unemployment rate meant that there has “never been
a better opportunity to get a job… In fact in the Australian economy
at the moment far from talk about unemployment there seems to be a lot
more talk about shortage of labour – shortage of labour is a good
problem to have.”

Up to a point, Mr Treasurer. ANZ senior economist David de Garis
says the jobs figures could mean the Reserve Bank pushes interest rates
higher. And that’s a very good reason for an ambitious Number Two to
keep $10 billion in the kitty – just in case.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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