Government to stimulate next month?

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Following yesterday’s fairy dust forecasts from the Australian Treasury, we get this today from The Australian:

A day after announcing $16.4 billion in savings to hit a wafer-thin $1.1 billion surplus this year, the Treasurer said the government was prepared to stimulate the economy if unemployment rose above budget forecasts.

“What we will choose is the economic settings which promote growth and jobs in our economy,” the Treasurer told ABC radio, when asked if he would start spending again if unemployment rose above 5.5 per cent.

So, with unemployment at 5.4%, there is every chance we can expect stimulus to commence next month. What a charade.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.