Paul Keating slams Liberal Party ‘surplus virus’

A surplus virus in the Liberal bloodstream is responsible for a flat economy, Paul Keating says.

Former Prime Minister Paul Keating has taken aim at the Liberal Party’s economic management. Picture: AAP

Former prime minister Paul Keating has criticised a “surplus virus” in “the Liberal Party bloodstream” as being responsible for a stagnant Australian economy “idling at the lights”.

Speaking on 2GB radio on Tuesday, Mr Keating accused the government of running Australia’s budget like “a corner shop”, and urged leaders to make the most of the record low 0.75 interest rate and invest in “a long program of really important infrastructure” as a way to stimulate the economy.

He told host Alan Jones that the Liberal Party acted as if “it’s naughty not to be in surplus”.

“I had four surpluses in my years, the first since the 1950s … Peter Costello, after me, was right about surpluses. But I think Peter’s … put a surplus virus into the Liberal Party bloodstream. They think you’ve got to have a surplus.

“The budget of the commonwealth of Australia is not like the budget of a corner shop, that you must … be able to close the door on Friday night and be in surplus.”

“The economy is idling at the lights … it’s like the car idling at the lights and waiting for the lights to turn green to take off again. The economy at 1.4 per cent is simply idling,” he said, referring to the economy growing at 1.4 per cent.

Asked what he would do if he were prime minister for a day, Mr Keating said he would “set up a proper structure for infrastructure … The problem with Infrastructure in Australia is it falls prey to politicians who want this highway and this electorate who want this bridge over this piece of railway.

“The big national projects should be bipartisan.”

Mr Keating mentioned a high-speed rail project between Newcastle and Sydney as a way to boost the economy and ease housing pressures. “At 250km/h, you do the Newcastle trip in less than half an hour. So essentially you turn Newcastle into a suburb of Sydney, but that relieves the housing pressures in Sydney. It lifts housing values in Newcastle.”

Mr Keating also said it was a matter of urgency that Australia better balance its strategic interest between China and the US.