Crikey Says

Dec 21, 2012

Crikey says: no surplus, no cry

Merry Christmas, Tony Abbott: Wayne Swan gifts the best election ad possible. Bernard Keane and John Quiggin weigh in. We're giving out presents to the best of arts and culture in 2012. How Screen Australia ran out of money -- six months early. And 2UE pushing its shock jocks to the centre.

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.

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