Fiscal Policy and Interest Rates in Australia

Alan Wood mentions my Policy article on fiscal policy and interest rates in his column in today’s Australian:

The very large (potential) budget surpluses of recent years tells us Australia has a structure of tax rates that is excessively high and major tax reform is needed.

It just has to be done in a way that doesn’t add to inflationary pressure—that is, it needs to be offset by spending cuts or spread over future budgets.

Yet it is quite clear from the run of huge budget surpluses the Howard Government has enjoyed that structurally, Australia’s tax rates are excessive.

This is no time to take serious tax reform off the economic agenda.

posted on 13 October 2007 by skirchner in Economics, Financial Markets

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