With the mid-year economic and fiscal outlook expected before the end of the year, the Australian Bankers’ Association (ABA) says a clear plan and community consensus is needed on repairing the “broken” budget.
Tony Pearson, chief economist and executive director of industry policy at the ABA, said Australia would have recorded eight consecutive years of budget deficits by the end of 2015-16, with the amount of government debt forecast to increase by a further $151 billion over the next four years.
“Here we are eight years after the global financial crisis and the Australian government is still borrowing 10 cents in every dollar it spends,” he said.
“Persistent deficits will compromise economic growth and lead to future generations having to pay to support today’s lifestyle.”
Mr Pearson said the banking industry strongly supports a clear plan and bi-partisan agreement to return budgets to a sustainable surplus over the medium term.
“We need community agreement on the cause of the fiscal problem. Analysis of the 2015-16 budget suggests the repair effort must primarily be directed to optimising spending,” he said.
“Australia has had 25 years of continuous economic expansion. The banking industry believes Australia has wonderful prospects and achieving fiscal repair will be integral to success.”
Alongside fiscal repair, the ABA has identified key areas to support economic growth and maintain Australians’ high living standards in the future, which include boosting productivity and workforce participation and focusing on reforms that improve the tax system’s efficiency and international competitiveness.