The AFR View
Substantial surpluses, not bigger deficits, should be running at this point
Instead, Jim Chalmers has confirmed that forecast deficits will widen as Labor’s Future Made In Australia budget centrepiece rolls out subsidies for the green energy and advanced manufacturing subsides.
If Australia had a fiscal policy framework and platform for prosperity that mirrored the Reserve Bank’s medium-term low inflation regime, we would not be debating whether Jim Chalmers’ third budget will be contractionary or expansionary and whether it will hinder the central bank’s monetary policy target of bringing inflation down in its 2 per cent to 3 per cent band by mid-2026.
The terms of trade are at a 100-year high, the jobless rate is at a near-record 50-year low, and government coffers are still overflowing with windfall taxes generated by high prices for Australia’s iron ore, coal and gas exports.
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