The comments section of the posts about Reinhart and Rogoff (1 and 2) have turned into something of a debate about Australian fiscal policy. I guess this was inevitable given that Swan is reported to have dropped the surplus for the entire outlook (at least that’s what I think he means!).
Some of the points had me wondering, so i went to check out the new report by the Gratten Institute, Budget Pressures on Australian Governments.
The net of spending and taxing policies is nicely displayed in figure 39 (page number 51 of the pdf) of the publication. This Government has indeed been very busy with fiscal policy: they found ~70bn of savings, and spent ~60bn of it. I’m surprised that there has been any structural improvement at all in the budget.