Surplus to requirements: budget politics and the quality of economic debate in Australia

Abstract

The Gillard Government's insistence on forecasting a budget surplus in the 2012-13 financial year was maintained in the face of deteriorating domestic and international economic conditions, and in the face of criticism from economic commentators and a range of interest groups. The opposition, to the extent it had a discernible budget policy, wished to see a larger budget surplus. The reasons why the government thought that promising a budget surplus was a good idea, and sticking to that promise as conditions changed, are various. The Labor Government needed to lift its ratings for economic management. The importance of this promise to the political fortunes of the government tells us much about the state of economic policy debate in Australia. Nearly thirty years after the Hawke Government set in motion the reforms that now enjoy bipartisan (if not public) support, the quality of economic debate does not appear to have improved a great deal. This paper explores a range of possible explanations for this phenomenon: a poor quality government, the notion of liberal populism, and the decline of the quality press.