Australia at least a decade off surplus

News.com.au reports:

The country may never get back into budget surplus if the government’s spending cuts continue to be blocked by Labor and the Senate, the governor of the Reserve Bank and the head of Treasury have warned.

The ominous predictions on the future of the nation’s finances were made by new Treasury Secretary John Fraser and RBA boss Glenn Stevens in an extraordinary briefing to Cabinet on Tuesday, The Daily Telegraph reports.

In a 20-page slide presentation, the finance chiefs showed the budget position continuing to worsen without significant structural reform.

They showed that even with an economic growth path of 3 per cent per annum, the budget would continue to be in deficit beyond the 10-year prediction made in last year’s budget forecasts.

While Labor has labelled the government’s spending cuts as “unfair”, Mr Fraser’s presentation showed the government was now borrowing $110 million a day to pay its interest bills on debt and the growing budget deficit.

It is a timely reminder that Labor left the Libs with an unsustainable spending track, just as NZ Labour did in NZ.  People may not like some of the Libs spending cuts, but the status qup is not sustainable.