NewsBite

Opinion

Stephen Grenville

Yes, we can spend our way to recovery if we are careful

Australia has rightly lost its fear of big deficits. But we must walk back debt in lockstep with private sector expansion.

COVID-19 transformed federal budget policy miraculously. Canberra had been rigorously on-course to satisfy the long-standing bipartisan objective of budget surplus. However, as soon as the enormity of the virus was apparent, a deficit of nearly 10 per cent of GDP – one of the highest in the world – was implemented, with universal approval.

Miraculous though this is, the next stage requires even greater policy dexterity: getting the budget back to normal. But the COVID-19 experience has upended what normality might be.

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

Read More

Latest In Economy

Fetching latest articles

Most Viewed In Policy

    Original URL: https://www.afr.com/policy/economy/yes-we-can-spend-our-way-to-recovery-if-we-are-careful-20210420-p57kut