From the AFR:
“To engage in some sort of European-style austerity for austerity’s sake approach would be, I think, very detrimental to growth in jobs and our economy and the government won’t do it,” Mr Swan said at an Australian Business Economists breakfast.
“We’re determined to come to a surplus at a pace that’ll be consistent with strong growth and full employment.”
Mr Swan would not say whether that meant scrapping a surplus in 2013-14 as well.
“I’m not going to try and pre-empt the forecasts that’ll be in the May budget,” he said.
“In December I said to cut further in the face of that revenue gap would have been deeply irresponsible and would’ve impacted on growth and jobs and when it did so would’ve had a further impact on the government bottom line.”
Quite right. Too late and too weakly put but hey!
This will come as some relief to the RBA, who clearly do not want to cut further lest our asset bubbles blow up further.
Still, one wonders what the ratings agencies will think. This is not counter-cyclical spending, it’s chronic economic and budget weakness.
