Can our political system deliver a surplus?

The current political landscape means the only way back to a fiscal surplus is through a return to 'normal' terms of trade and nominal GDP conditions.

There is a real question over whether Australia any longer has a political system that can deliberately run a fiscal surplus -- ever, let alone over the course of the economic cycle, which is the official strategy.

Yesterday’s MYEFO forecasts an eventual return to surplus only because nominal GDP growth is predicted to bounce back to more than 5 per cent, from this year’s 1.5 per cent, and to stay there.

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