Politics With Michelle Grattan

Australia’s budget situation has been quietly improving. Deloitte Access Economics director Chris Richardson says the remarkable strength of the Australian economy means it no longer needs the emergency support it has been getting from the government and the Reserve Bank. Government spending fell by a record 10% in the year to January. He counsels against emergency measures to protect Australians from the soaring price of petrol, saying today’s international oil price implies that in less than a fortnight petrol prices will be between 15 and 20 cents lower a litre. While there is no guarantee they won’t climb again, the relief that’s in store is half as big as the relief the government could deliver by cutting fuel excise, a measure he says would be like applying a Band-Aid that would be difficult to rip off. Rather than pumping more money into the economy, the March 29 budget should be withdrawing support in a measured fashion. Although government debt has climbed, low interest rates mean the payments on gov