Australia’s inexorable run into deficit, and poll says we’re not happy about it

More than half of Australian voters say they would be concerned if the Federal Government pushed the budget into deficit, Newspoll reveals today.

More than half of Australian voters say they would be concerned if the Federal Government pushed the budget into deficit, Newspoll reveals today.

But it may be a moot point. According to Access Economics, falling commodity prices are taking such a toll on the economy that Australia will be in deficit next financial year anyway.

Access economist Chris Richardson told ABC radio this morning that even if Australia’s economy gets no worse and the Government doesn’t spend another cent in this downturn, Australia will be in deficit by a billion dollars next financial year and four billion dollars a year after that.

He says that while Federal Treasurer Wayne Swan says the Government’s mid year economic review forecast modest surpluses and modest growth, Access Economics uses a different approach.

Last week Reserve Bank Governor Glenn Stevens indicated to the Government that running into deficit might be necessary to avoid an economic downturn.

However Australian voters feel differently. Asked over the weekend if they would be concerned by a return to deficit for the first time since 2002, 56% of voters said yes, while 39% said they would not be concerned, News Ltd reported today.

The poll also shows that on the first anniversary of its election, the Rudd Government has maintained its 10-point two-party preferred lead over the Coalition, polling 55% support to 45%.

The poll found that Rudd’s personal satisfaction rating rose two points to 67% support, four percentage points higher than 12 months ago, and he stretched his lead as preferred prime minister from 40% to 42%.