Greg Jericho
Chief economist

Ahead of tonight’s budget you can pretty much pre-write the lines that we are going to see from conservative media outlets and the opposition. It will be able about debt, deficits and “spending out of control”.

So a couple things – first our debt levels remain very low compared to the rest of the OECD. Over the past 50 years we have had a deficit 33 times – so two-thirds of the time. A budget surplus is an abnormality. You really need something like a mining boom or a boom in resource prices after a global pandemic to have the type of conditions that justify a surplus. The economy is just limping along at the moment, households are not spending much. A budget deficit is the right thing at the moment as it means the government is helping keep things chugging along rather than trying to slow everything.

But also remember, there is a fair bit of double standards when it comes to reporting the budgets. IN the March 2022 budget Josh Frydenberg went big on sugar-hits trying to spend his way to an election victory. Did The Australian and other conservative media organisations smash them for debt and deficit? Well… no. Instead The Australian ran with the headline of “The Cost of Winning” And Dennis Shanahan suggested glowingly that “Josh Frydenberg has done everything he can in this budget to give the Coalition the best chance it has of winning the next election.”