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Stephen Grenville

A budget surplus is just a very expensive luxury

Budget policy is one reason for our mediocre economy. We should ignore discredited ratings agencies and spend for growth.

Rating agency Standard and Poors has just issued its usual finger-wagging warning to Australia about the dangers of budget deficits.

Responding to the increasingly vocal calls for fiscal policy to address what may be a weakening economy, S&P’s Anthony Walker said: "If this fiscal stimulus involves substantial spending initiatives and changes the trajectory of the budget, then doing so could increase downward pressure on our rating and outlook for Australia.”

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Stephen Grenville is a former deputy governor of the Reserve Bank of Australia and a non-resident fellow of the Lowy Institute.

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    Original URL: https://www.afr.com/policy/economy/a-budget-surplus-is-just-a-very-expensive-luxury-20191202-p53g2i