House Speaker McCarthy wants to put the US on a path to a balanced budget as debt ceiling negotiations begin with President Biden. Here’s why it won’t be easy to repeat what Bill Clinton accomplished.
Peter Martin, Crawford School of Public Policy, Australian National University
Chalmers was careful during the campaign to reject the idea of a tax-to-GDP cap. He is going to have to raise much more tax, and start a conversation about how – beginning with next week’s budget.
Whether a budget should be in surplus or deficit depends on the circumstances of the time. Gillard didn’t recognise it, Abbott didn’t recognise it. At last the message is getting through.
Does the budget tabled by Finance Minister Tito Mboweni (right) speak to President Cyril Ramaphosa’s (left) vision of the new economy?
Getty Images
Changes to the government’s targets in its budget update give it room to spend more.
The forecast for Australia’s economic growth in 2019-20 has been cut by 0.25%, and the projected surplus for this financial year slashed by A$2.1 billion.
The Conversation
Politics with Michelle Grattan: Mathias Cormann and Jim Chalmers on the mid-year budget update
The Conversation, CC BY29,7 MB(download)
The figures indicate a worsening economy, but the government has sought to put a positive spin on the situation, saying the Australian economy is showing resilience.
The update has slashed growth and surplus forecasts, as the economy is buffeted by global and domestic pressures.
Lukas Coch/AAP
The projected surplus has been revised down from A$7.1 billion at budget time to $5 billion for this financial year.
Reserve Bank governor Philip Lowe (right) says he needs government help to boost the economy. Treasurer Josh Frydenberg is yet to provide it.
Dan Himbrechts/AAP
Peter Martin, Crawford School of Public Policy, Australian National University
Every one of the 13 economists surveyed by The Conversation thinks more stimulus is needed. None think it should all come from the Reserve Bank. Most think the budget surplus can wait.
This week’s Essential poll showed 56% of voters would prioritise stimulating the Australian economy over getting back to budget surplus.
Mick Tsikas/AAP
With a relatively low debt to GDP ratio, Australia was never at risk of becoming Greece. But Germany, with negative interest rates and scant prospects for economic growth, is an open question.
If you’re going to stimulate the economy, it’s wise not to wait.
Shutterstock