RBA Governor Stevens has tipped a bucket on Australia’s political class telling them that “slogans” and “name calling” need to be jettisoned in favour of a “serious conversation” on Australia’s economic, fiscal and budgetary outlook.
Stevens said that while he didn’t want to get into the specifics of the budget measures that, “the past year shows that this is not an easy conversation to have. It’s very difficult, and it will require strong political leadership I think, not just from the government, but from other political parties and individuals who claim to be serious. You have to have a serious conversation about this stuff.”
You are unlikely to hear a sterner warning from an Australian central banker.
Stevens said the nature of public debate around the budget had been too simplistic.
I think we have had a tendency to kind of have a few sound bite ideas; surplus good, deficit bad, and as long as we have got a surplus, you know, don’t worry about it. Well, actually it matters how you got the surplus; it matters what you did with it. And even if you’re reducing debt, it matters how you do that, and what the debt is for. A country with no debt but no public assets, is that actually good? So I think we might have tended to over-simplify this discussion.
Stevens noted that Australia is not the only country “that is finding it harder than we used to craft a narrative and find a consensus.” But he doubled down on his warning to the political class, saying:
It may be that some of the big things that were done in the 1980s were done with that sense of urgency that “we’re actually in a crisis and we just have to”, and we don’t quite have that sense of crisis right now. And I personally would be rather in two minds about whether we want to find ourselves in a position of crisis. I guess what we’re trying to say is let’s have the adult conversation about these things before we get to that day if we possibly can. It would be very disappointing if what we find is we can’t have it until we are in a crisis. That would be very disappointing; none of us would want that.
That’s a theme we have been talking about here at Business Insider recently.
The economy we have is the economy we have. The global economic backdrop is the global economic backdrop.
But as Stevens is saying, and as Maurice Newman has said, if Australia does not have an adult conversation about the future now then our choices will be limited, perhaps taken away from us, by the market.
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