Get set for fancy fiscal footwork
There is an interesting debate playing out at the highest levels of the Baillieu government that would have been inconceivable 18 months ago. Should keeping the budget in surplus be a sacrosanct political objective right now? The politics surrounding next Tuesday's state budget are diabolical. Revenues have been so diminished that the government has three choices: slash spending, raise taxes or become the first Victorian government to hand down a budget deficit since the horror days of the early 1990s.
(Or a combination). According to one source, the debate has become a source of mounting tension between Treasurer Kim Wells and Premier Ted Baillieu. Advertisement: Story continues below For months Wells has been arguing that keeping the budget in surplus should remain at the centre of the government's political and economic strategy. The surplus-at-all-costs mantra goes like this: place the budget on a sustainable footing by paring back spending and reducing waste, deliver a string of future surpluses to pay for infrastructure without taking on debt. Jobs and higher productivity will flow as a dividend.