The Evolution of Fiscal Policy in Australia
This 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 3½ per cent of GDP in 1983/4 to a surplus of 1¾ 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 4¾ 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.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
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.
References listed on IDEAS
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.:
- 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.
- Edward Nelson, 2005.
"Monetary Policy Neglect and the Great Inflation in Canada, Australia, and New Zealand,"
International Journal of Central Banking,
International Journal of Central Banking, vol. 1(1), May.
- Edward Nelson, 2004. "Monetary policy neglect and the Great Inflation in Canada, Australia, and New Zealand," Working Papers 2004-008, Federal Reserve Bank of St. Louis.
- Nelson, Edward, 2005. "Monetary Policy Neglect and the Great Inflation in Canada, Australia, and New Zealand," MPRA Paper 822, University Library of Munich, Germany.
- 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.
- David Gruen & Glenn Stevens, 2000. "Australian Macroeconomic Performances and Policies in the 1990s," RBA Annual Conference Volume,in: David Gruen & Sona Shrestha (ed.), The Australian Economy in the 1990s Reserve Bank of Australia.
- Guy Debelle & Gabriele Galati, 2007. "Current Account Adjustment and Capital Flows," Review of International Economics, Wiley Blackwell, vol. 15(5), pages 989-1013, November.
- Gabriele Galati & Guy Debelle, 2005. "Current account adjustment and capital flows," BIS Working Papers 169, Bank for International Settlements.
- 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.
- Makin, A.J., 1988. "Targeting Australia’s Current Account: A New Mercantilism?," Economic Analysis and Policy, Elsevier, vol. 18(2), pages 199-212.
- David Gruen & Matthew Garbutt, 2004. "The long term fiscal implications of raising Australian labour force participation or productivity growth," Treasury Working Papers 2004-01, The Treasury, Australian Government, revised Apr 2004. Full references (including those not matched with items on IDEAS)