We'll need to spend at least an extra 15-20% of GDP per year. It'll be more palatable if it is funded by COVID bonds.
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The attempts at product differentiation that preceded the $18 billion program are all but exhausted.
MYEFO contains a long-overdue admission: that low wage growth is the new normal. It'll take extraordinary spending restraint to make the surplus forecasts stick.
The treasurer has pulled out all stops to continue to forecast budget surpluses, but they are low, and don't take account of several likely costs.
From wage growth to renewable energy to religion, projections are being treated as predictions. We'd be better off insisting on genuine forecasts.
A big surplus will come. It should be saved for something important, not simply spent.
There are limits on how much governments can spend without earning, although increasingly politicians are behaving as if there are not.
History suggests the government will spend most of the extra $10 billion per year that the MYEFO will reveal on Monday. The only problem is, those riches won't last.
Top contributors
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Professor, School of Economics, The University of Queensland
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Professor of Economics, UNSW
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Industry Professor, University of Technology Sydney
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Professor of Macroeconomics, University of Sydney
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Fellow, Grattan Institute
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Danielle Wood is a Friend of The Conversation.
Program Director, Budget Policy and Institutional Reform, Grattan Institute
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Visiting Fellow, Crawford School of Public Policy, Australian National University
