Economy

Dec 21, 2012

Good riddance to a petty promise

The government's promise to return a surplus this year was silly and made little economic sense, writes economist Professor John Quiggin. There are much more important issues to debate.

In a belated victory for good sense, Wayne Swan has finally announced the abandonment of the promise to achieve a budget surplus this financial year. More surprisingly, Joe Hockey (apparently contradicting his leader) has taken the opportunity to back away from the Coalition’s promise to bring in a surplus in its first year, should it win the election.

7 comments

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7 thoughts on “Good riddance to a petty promise

  1. zut alors

    ‘The government’s promise to return a surplus this year was silly…’

    Even sillier is the fact that some people believed it… or pretended to. Swan is right ie: he won the economic argument but lost the political one. And Hockey and his coven claim that’s bad because -?

  2. iggy648

    Can you have a coven of warlocks?

  3. zut alors

    @ iggy, yes yes, the collective is an incantation of warlocks. But coven sounds more sinister.

  4. TheFamousEccles

    Admittedly, I studied economics many years ago at Uni and never worked as one, but the basic truisms contained in Professor Quiggin’s article have stuck with me. How both sides of politics in Australia can be so easily distracted and pig-headedly steadfast in their pursuit of the unlikely and unattainable is an enduring mystery to me.

    It hasn’t ever made economic sense.

    Thanks for an informative article.

    *Disclaimer – TheFamousEccles is a total lefty [email protected]

  5. Henry Schmiggins

    Great article and I particularly enjoyed the line ‘The question of whether some particular measure is a few billion dollars either side of zero, in a budget of more than $350 billion, is of no significance whatsoever’. The downsides of austerity in a recession have been graphically illustrated in much of Europe. It just makes things worse. The time for budget surpluses is during the boom years.

    And in regards to raising taxes; the time has come for us to have an adult conversation (something often missing from our politicians debates) about our expectations of government… and what these services actually cost. If we need to slightly raise taxes to maintain or improve health, education, infrastructure, social services and environmental initiatives then so-be-it. To quote Justice Oliver Wendell Holmes, “Taxes are the price we pay for a civilized society”. Count me in.

  6. Achmed

    TheFamousEccles…so you’re a bit like Abbott? He also studied economics but never worked as one.

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