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ECONOMIC reform in Australia has been a triumphant success. From the mid 1980s on, it pulled our relative economic fortunes out of their decades-long decline and propelled us through the Asian crisis. Reform was built on simple and compelling principles, including some that affronted the commonsense beliefs of many ordinary Australians. Surely tariffs create jobs? Well, they don’t – and so we cut them.
But having made such progress, we’ve gone backwards in one area, and all in the name of a kind of faux economic rationalism. Enter fiscal populism. Rather than simply getting budgets into operating surplus – mostly a very good thing – Australian governments have embraced the notion that all debt is bad. But most of the time debt is only bad if it’s used to fund recurrent expenditure…
