7.30 host Leigh Sales grilled Treasurer Josh Frydenberg over the “rosy picture” he is trying to paint about Australia’s economic reality, after delivering the mid-year budget update on Monday.
The update revealed that Australia’s economic growth plummeted since April, with wage growth, inflation, household consumption and business investment all down. Frydenberg cut the expected budget surplus for the 2019/2020 budget by $2.1 billion, down from $7.1 billion estimated earlier this year.
“This mid-year economic forecast has downgrades everywhere you look. Growth, inflation, wages, household consumption, business investment growth. Every sign points to a struggling economy. How is it not reckless to cling to your surplus-at-all-costs mentality?” Sales queried Frydenberg in her opening question.
“Just to correct the record there for you, Leigh, these numbers show that the participation rate is better than what was forecast at budget, the public final demand, which is government spending on infrastructure as well as programs like the NDIS is also up from budget …” Frydenberg responded.
Sales, shot back: “Treasurer, I don’t think you are correcting anything there. I’m pointing to the major economic indicators – growth, inflation, wages, household consumption.”
A struggling Frydenberg continued to try and push the line that Australians should feel “confident about their economic future” because “we are living within our means”.
“The budget is back in balance for the first time in eleven years,” he said.
“What do you think Australian voters care more about – a tiny budget surplus next year or staying out of recession?” Sales asked.
“The budget surplus has never been about a trophy for the cabinet shelf,” Frydenberg said, before accusing Labor for the Coalition’s “inherited debt”.
“Treasurer, sorry to keep cutting you off but I want to clear that up. It’s not debt that you have inherited. Debt has doubled since the Coalition took office,” said Sales.
“The case for fiscal expansion is staring you right in the face, but you are determined to bank money, rather than spend it in an economy that’s desperate for stimulus,” she said.
“You’re trying to paint a very rosy picture. But if everything is as rosy as you suggest, why are we seeing GDP growth downgraded, why are we seeing household consumption growth downgraded, business investment growth downgraded, wages growth downgraded?”