Sep 18, 2012

Gillard mustn’t bruise a budget surplus

In light of favourable polls, Labor may be tempted to soften its budget stance. This would be a mistake, says Stephen Koukoulas of Business Spectator, not least because of the flow-on effect of higher interest rates.

Labor must not use its recent recovery in the polls to alter its big picture macro-economic policy agenda of tight and targeted spending and a return to budget surplus.

With the polls showing Labor closing in on the Coalition, there might be a temptation for some in the government to flick the economic policy switch to some populist agenda to try to build on this favourable political news.

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4 thoughts on “Gillard mustn’t bruise a budget surplus

  1. fredex

    I am sick to death of pundits writing headlines like “Gillard has to ….whatever…”, “Gillard faces crisis …”, “Gillard needs to ….” and so on.
    We get enough, too many actually, of such from Murdochistan and allies, why do we ‘need’ to have them here?

  2. Gavin Moodie

    This piece might just as well argue against Gillard outlawing motherhood: there is no prospect of it happening, just as there is no prospect of Labor not bringing down a surplus.

  3. Neil

    John Howard who, at a time of strong private-sector activity, cranked up government spending

    Howard ran surplus budgets of $16B, $17B and $20B in his last three years and Koukoulas says he was guilty of reckless spending. He saved $50B in his last three years. Koukoulas has lost any sense of judgement.

    Furthermore Wayne Swan is getting much more revenue from the mining boom than Costello did and has wasted the lot. Labor has not saved one cent of money.

    Talk about wasting the biggest mining boom in Australian history.

  4. Ravenred

    You’re being a bit reductionist in blaming Howard’s 2007 loss as being primarily (or even chiefly) related to his pork-barelling. Interest rates were doubtless a part, but not all voters pay as close attention to the key economic indicators as yourself. Similarly, what makes an economist support a government isn’t always what drives the voting patterns of others. FWIW, I doubt Gillard will risk running a deficit (which she perhaps SHOULD have for the last budget) in an election year, even to fund Gonski or the NDIS.

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