Australia’s Prime Minister Tony Abbott faces some tough economic choices, after it was last month revealed the budget deficit would be $47 billion in this financial year.
Luckily two former PMs — Bob Hawke and Paul Keating — have offered some advice in an interview with The Australian.
When Hawke was PM, with Keating as his treasurer during the 1986-87 cabinet, they faced a plummeting dollar and terms of trade, which has been described in the article as a similar challenge to that faced by Abbott and Joe Hockey.
The general message is that spending needs to be cut. From the article, here is some of what Hawke, the PM from 1983 to 1991, said:
“It’s a very, very large budget deficit that you’re looking at, projecting $47 billion, and they seem to be walking away from the suggestion that they can move into surplus in this first term.
“What is required is the same thing. You’ve got to have a prime minister and treasurer, and a competent ministry which understands the issue and is prepared to make hard decisions. So it’s the same challenge.”
“The broad lesson is to inform the public of the problem and then earnestly pursue the remedies.
“When you’re cutting outlays like we were, we had outlays growing at less than the inflation rate for a number of years, you’ve really got to want to do this. You’ve really got to have the skills.”
The interview coincides with the release of the 1986-87 cabinet papers from the National Archives of Australia.
There’s more here.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.