The Evolution of Fiscal Policy in Australia
AbstractThis paper examines the evolution of Australian fiscal policy and the fiscal policy framework over the past quartercentury. Following the early 1980s recession, a sustained fiscal consolidation saw the general government budget balance (for all levels of government) move from a deficit of 3� per cent of GDP in 1983/4 to a surplus of 1� per cent 5 years later in 1988/9. A severe recession in the early 1990s interrupted this process, and the budget returned to sizeable deficits which peaked at 4� per cent of GDP in 1992/3. The second half of the 1990s saw a repeat of the experience a decade earlier, with the budget returning to surplus in 1997/8. In contrast to the 1980s experience, however, the general government sector (for all levels of government) has recorded surpluses for the subsequent 8 years to the present. The paper outlines Australia's macroeconomic experience over this time and argues that there have been two significant medium-term factors motivating the extended periods of fiscal consolidation. The first factor, relevant since the mid-1980s, has been the large Australian current-account deficits since that time, and the associated build-up of net foreign liabilities. The second factor, which entered the public debate more recently, is a desire to provide fiscal policy flexibility to respond to the ageing of the population and the projected rising public cost of health services--both influences that are likely to be of increasing importance over the next generation or so. The paper discusses the introduction and evolution of Australia's medium-term fiscal framework which has been put in place to respond to these challenges. Copyright 2005, Oxford University Press.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by Oxford University Press in its journal Oxford Review of Economic Policy.
Volume (Year): 21 (2005)
Issue (Month): 4 (Winter)
Contact details of provider:
Web page: http://oxrep.oupjournals.org/
Other versions of this item:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- W. Max Corden, 1991. "Does The Current Account Matter? The Old View And The New," Economic Papers, The Economic Society of Australia, vol. 10(3), pages 1-19, 09.
- Gabriele Galati & Guy Debelle, 2005.
"Current account adjustment and capital flows,"
BIS Working Papers
169, Bank for International Settlements.
- Makin, A.J., 1988. "Targeting Australia’s Current Account: A New Mercantilism?," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 18(2), pages 199-212.
- David Gruen & Tim Robinson & Andrew Stone, 2005. "Output Gaps In Real Time: How Reliable Are They?," The Economic Record, The Economic Society of Australia, vol. 81(252), pages 6-18, 03.
- J. D. Pitchford, 1989. "A Sceptical View of Australia's Current Account and Debt Problem," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 22(2), pages 5-14.
- Brittle, Shane, 2009. "Ricardian Equivalence and the Efficacy of Fiscal Policy in Australia," Economics Working Papers wp09-10, School of Economics, University of Wollongong, NSW, Australia.
- Eric M. Leeper, 2009.
"Anchoring Fiscal Expectations,"
Caepr Working Papers
2009-015, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
- Neil Dias Karunaratne, 2008. "The Polemics and Empirics of the Sustainability of Australia’s Current Account Deficit - Revisited," Discussion Papers Series 364, School of Economics, University of Queensland, Australia.
- Jonathan Kearns & Philip Lowe, 2011.
"Australia's Prosperous 2000s: Housing and the Mining Boom,"
RBA Research Discussion Papers
rdp2011-07, Reserve Bank of Australia.
- Jonathan Kearns & Philip Lowe, 2011. "Australia's Prosperous 2000s: Housing and the Mining Boom," RBA Annual Conference Volume, in: Hugo Gerard & Jonathan Kearns (ed.), The Australian Economy in the 2000s Reserve Bank of Australia.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.