Where Peter stands - The Economy

The strong economy Australia enjoyed under the previous Liberal-led Government helped to grow jobs and investment, and allowed small business to flourish. On leaving office, the average annual growth rate stood at 3.5 per cent, unemployment was at 4.2 per cent (a 33-year low) and the incoming Rudd Labor Government was handed a handsome $20 billion budget surplus.

Unfortunately, just a year later Reserve Bank Governor Glenn Stevens had to warn that the quality of spending decisions must be maintained – a clear warning to Mr Rudd not to run the Government into deficit with politically appealing but economically reckless spending. Now more than ever Australia’s future is dependent upon cautious spending decisions.

Time and again the ALP has failed when it comes to economic management. Even in the boom times of the Howard years almost all State Labor governments recklessly drove their budgets into deficit. Today, their prospects of fixing services and infrastructure are particularly bleak.

Given the strong federal finances Mr Rudd inherited, Australians rightly regard the prospect of a national deficit budgets as a failure in economic management. As Liberal Party Leader Malcolm Turnbull has stated, Australia should not give Mr Rudd a leave pass for undisciplined and unbridled spending. The last time a Labor Government went into ‘temporary’ deficit it lasted for six years, and was only stopped when they lost office.