From Richard Denniss at the AFR:
Imagine if the Reserve Bank of Australia (RBA) conducted monetary policy the way the Morrison government conducted fiscal policy. Step one: publish optimistic forecasts of GDP and wage growth to create “confidence”. Step two: set interest rates five years down the track, based on those optimistic forecasts. Step three: when the economy dramatically slows, stick with your original policy settings. What could go wrong?
…So, what’s a Treasurer to do? As his optimistic growth forecasts come unstuck, should he stick to his promises about a strong economy, or stick to his promises of an arbitrary budget surplus? Most economists, retailers and job seekers would prefer the Coalition prioritise the fiscal stimulus required to deliver growth over the fiscal constraint required to deliver a budget surplus. But the Treasurer has made clear he’ll be prioritising political symbolism over economic management.
