IMF underscores need for fiscal restraint

25/01/12

The release of updated forecasts by the IMF underscores the imperative for the Australian government to exercise fiscal restraint and to act immediately to return the Budget to surplus and to start to pay off Australia’s record debt.

The Government has made Australia more vulnerable to any global downturn by imposing new carbon and mining taxes, which will hurt business investment and increase the cost of living, and by failing to return the Budget to surplus at a time of record terms of trade.

Australia is not as prepared for an economic downturn as it was in 2008. Labor inherited an economy in good financial shape, and was left with $70 billion in net worth by the Coalition.

The Government has turned this into record deficits and record debt in record speed.

Australia is currently running an underlying cash deficit of over $37 billion with net debt heading towards $136 billion.

On more than 100 separate occasions Wayne Swan has promised to deliver a Budget surplus in 2012-13 and the Coalition will be keeping him to his word.

The government must immediately act to restore confidence and jobs by repealing the carbon and mining taxes and cutting wasteful spending to return the Budget to surplus.

The government must also come clean with the Australian people as to whether it intends to contribute additional funding to the IMF.

Further, the government should explain to taxpayers whether it would be in Australia’s national interest to contribute additional funding and from where it plans to fund any such contribution.