Deutsche Bank’s chief economist for Australia argues that fiscal stimulus saved the economy in the first crisis, not mining. If there is a second crisis, that money will be harder to come by.
In 2007 Australia had a national budget surplus of 0.7 per cent of gross domestic product across the federal and state governments. Fast forward to 2011-12 and we are running a national budget deficit of 5 per cent of GDP, despite being some years into recovery.
If Australia can’t afford it, who can?
