Treasury greybeards warn of Australian financial crisis

Former department deputy secretary Mike Callaghan…said if the government took that path – effectively signalling to the world that it is not doing enough fiscal repair – there would be a “crash down the road” involving a credit downgrade that drives up the cost of managing Australia’s debt burden.

“That will be quite a nasty shock,” Mr Callaghan said. “That would bring a bigger crisis than the downgrade in the US – they don’t rely on borrowing from the rest of the world.”

…Former Treasury secretary John Stone said the government has no option but to continue pushing for the measures put up in last year’s budget.