Wednesday, November 26, 2008

Rudd's done it!

The 'D' word.

"KEVIN Rudd has conceded for the first time that Australia's budget may have to go into "temporary deficit" if the global financial crisis worsens.

And the Prime Minister warned any failure to do so would be irresponsible, putting jobs at risk.

It's the first time the Prime Minister has finally admitted the budget may go into the red after weeks of word games over the state of the increasingly wafer-thin surplus."

JUST IN: Rudd's words:

"If Australian economic growth slows further because of a further deepening of the global financial crisis, then it follows that the Australian Government revenues will reduce further.

Under those circumstances, it would be responsible to draw further from the surplus and, if necessary, to use a temporary deficit to begin investing in our future infrastructure needs including hospitals, schools, TAFEs, universities, ports, roads, urban rail and high speed broadband.

Mr Speaker, under those circumstances, such action would support growth, would families and jobs and would be undertaken in the national interest. In fact Mr Speaker, failing to do so would be irresponsible – and would sacrifice growth and jobs. But any such action would need to be temporary, consistent with the discipline of maintaining a surplus across the economic cycle.

These circumstances do not prevail in Australia at present. Our current circumstances do not require us to embrace such a course of action. And the Government will do everything possible to swim against the global tide to support both growth and the surplus – but this is becoming tougher and tougher."

Turnbull's response was unfortunate... along the lines of there being no such thing as a temporary Labor surplus.


Marek said...

Turnbull is becoming very predictable. Most people are more than likely relived to hear that the government is willing to help them even if it means borrowing money, instead of simply running up a profit regardless of the social cost.

WT said...

Turnbull doesn't seem to understand that he's in opposition, he expects the Government to act on his advice...your side lost Malcolm! As for Julie Bishop has successfully transformed herself into a vexatious shrew.

Anonymous said...

It's good to see that the government is finally willing to admit the reality of the situation. I agree that the opposition's response is irresponsible and misses the crux of the issue.


Anon said...

Turnbull is actually spot on.

1) Under Labor, there will be an increase in spending (Newstart, maternity leave, pensioners/ carers, the ETS, health, education, infrastructure projects, etc.) I also expect efforts to increase tax revenue (the alcopops controversy is just the beginning).

2) But it is fairly obvious that despite the tough talk, Tanner is incapable of delivering a substantial cut in govt expenditure.

Anyone willing to estimate when the deficit moves back into surplus under Labor? My guess is: never.

Hawke/Keating were reformers who delivered surpluses, but this govt is not reformist, just look at how Rudd treats Keating or his ridiculous attacks on 'extreme capitalism' or executive pay. The best description is 'Whitlam lite' (i.e. tax and spend).

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