The Federal Government has been warned against going on a Budget spending spree by the International Monetary Fund, saying now is the time to fix the nation’s finances before an “eventual” worldwide economic downturn hits. As Treasurer Scott Morrison said the Government was committed to “living within its means”, the IMF revealed growing concerns many nations were failing to “save for a rainy day” with overall debt continuing to climb. Globally, countries now owe a record $US164 trillion.
It is now approaching levels not seen since the end of World War II when many nations borrowed from their citizens to continue the war effort.
Australia’s gross debt has climbed to a record $523.4 billion, with the Turnbull Government expecting this to approach $700 billion towards the end of the next decade.
Mr Morrison said yesterday the Budget had shown a consistent projection of a return to surplus in 2021 and that had not changed. While the Budget does project surpluses, they are planned to be just 0.2 per cent of GDP from 2021, well short of surpluses planned by nations such as New Zealand (2.5 per cent), Singapore (2 per cent) and Norway (4 per cent).
