“The prospect of a budget in surplus in the 2019-20 year is very good news and is a critical step towards rebuilding a fiscal buffer that can be called on in the event of a substantial downturn,” Ai Group Chief Executive Innes Willox said today.
“The recovery of Australia’s fiscal position since the Global Financial Crisis has accelerated in the past couple of years as the pace of GDP and jobs growth has picked up and as spending growth has been contained.
“Ai Group supported the more gradual consolidation of fiscal position in the years when GDP and jobs growth were more fragile and vulnerable to a sharp withdrawal of public sector demand. In the past couple of years we have supported a responsible drive back into surplus as the economy has improved and as the labour market has slowly tightened.
“While reports from businesses suggest the pace of growth may be slowing, the economy is still edging nearer to capacity and now is the time to make fiscal hay by paying down the stock of debt.
“In this context it is critical that election-year politics does not descend into fiscal recklessness and that any new spending initiatives are carefully targeted,” Mr Willox said.