We hate to burst everyone’s bubble. We know it’s nearly Christmas and actual news is becoming thin on the ground. But we should calm down about the government’s “probable” abandonment of its commitment to surplus this financial year. One reason: perspective.
In this graph from the most recent Mid-Year Economic and Fiscal Outlook, you could flip each of those black bars for Australia around the other way and we’d still be well short of the debt levels of many of the world’s major economies. The only consequence might be — might be — that we’d lose that coveted triple-A credit rating and send central banks and foreign investors elsewhere in the search for a safe haven currency, thereby sending the Australian dollar back below parity.