Debt and forget
It wasn't that long ago that Australia's major political parties obsessed over budget surpluses at almost all costs. Now the pendulum has swung in the other direction.
There was a time, not that long ago, when a warning from a ratings agency that Australia’s sovereign credit rating was at risk of a downgrade due to excessive government spending would have set off a political earthquake. Not so this week.
Sure, S&P’s lament over the nation’s finances generated plenty of headlines, including in Capital Brief. But the warning over the coveted AAA rating is unlikely to substantially alter the trajectory of the election campaign, which is still being dominated by Donald Trump and cost-of-living issues.
As our economics correspondent Jennifer Duke — who is on the road with the prime minister in the last week of campaigning — reported overnight, there are growing concerns it will now take a genuine crisis for our politicians to make a concerted effort at fiscal repair. “We have somehow jettisoned from Australian politics any incentive for either party to maintain fiscal discipline,” prominent economist Steven Hamilton told Jennifer.
That’s a striking change in attitude towards the budget from the major parties compared with how it was treated from the late 1990s until, arguably, the Covid-19 crisis.
