Josh Frydenberg joked that two budgets in seven months were taking its toll on his hairline before launching into a series of commitments to drive unemployment into the 4 per cent range and to hold fire on the fiscal repair strategies that his opponents believe are a euphemism for austerity measures.
“Looking further ahead, our challenge once we recover from this crisis, is to again rebuild our fiscal buffers…But we won’t be undertaking any sharp pivots towards ‘austerity’,” Mr Frydenberg said.
“For fiscal consolidation to be sustainable, it should rely on gradual changes that are made over time and that provide the foundation for a growing, thriving economy.”
But Mr Frydenberg stopped short of promising another big spending budget, saying “large scale government support is no substitute for sustainable jobs in profitable firms” and that the government would instead focus on growing the economy in order to service its debt obligations.
“Treasury’s projections are that nominal economic growth will exceed the nominal interest rate for at least the next decade…As a result, by growing our economy we can maintain a steady and declining ratio of debt to GDP over the medium term as we continue to move towards balancing the Budget,” Mr Frydenberg said.
The speech was criticised by shadow treasurer Jim Chalmers, who questioned the Morrison government’s ability to deliver on its promises in the absence of actual policy announcements, saying “they fall short of their rhetoric again and again”.
“What matters with the Morrison Government is not what they announce in speeches but what they actually deliver…Of course they should be more ambitious on full employment, we’ve been saying that all along,” Mr Chalmers said.
“But they don’t have a credible plan to achieve it. It’s remarkable that he has had to rule out austerity measures – austerity should never have been on the table in the first place…We’ve heard all kinds of spin from the Treasurer before budgets but the Liberals’ real record over eight long years has been weak wages growth, job insecurity and underemployment.”
