David Bradbury and Christine Milne debate the issue.
David Bradbury, Assistant Treasurer
It is essential that we return the budget to surplus because it is in the best interests of working Australians and small businesses.
Returning the budget to surplus is important for the cost of living because it will help keep inflation contained and give the Reserve Bank more flexibility to cut interest rates and take pressure off the high Australian dollar.
Returning to surplus will demonstrate the strength of the Australian economy and is our best defence against any unexpected shocks at a time of global economic uncertainty.
Of course, returning to surplus has been made harder by the global turbulence we've just experienced – the worst global meltdown in the global economy since the Great Depression ripped $140 billion from government revenues over the past few years.
But supporting jobs during difficult times - like the global financial crisis - is the right thing to do.
By investing in infrastructure we avoided recession and supported jobs. While the rest of the world shed more than 27 million jobs during the GFC, we have created more than 700,000 since coming to office.
When the economy gets back on an even keel, the government needs to balance its books.
While the Australian economy continues to face challenges, unemployment remains low, growth is returning to trend and we have a record pipeline of investment.
With stronger fundamentals than any other advanced economy, now is the time to get the budget back into balance.
This will be a hard budget with hard decisions, but we will deliver a surplus with targeted and responsible savings, while protecting the frontline health and education services that Australian families rely on.
This is because our plan to strengthen the Australian economy for the future is shaped by our commitment to our traditional Labor values of fairness, opportunity and reward for effort.
Christine Milne, Greens leader
Just like a family or a business, our nation must be in surplus over the economic cycle. But aiming for a surplus this year at all costs is a political imperative, not an economic one, which could have very negative consequences for a lot of people as well as for our environment.
My fear is that Australia is running a two credit card economy. We're focusing so much on getting one card into the black that we haven't realised the debt we're racking up on the other one. That debt could send families and businesses to the wall now and will certainly make life harder for our children if we don't immediately start building a more environmentally sustainable society.
The Greens have proposed multibillion-dollar savings and revenue measures, including removing handouts to polluters and stopping the big business tax cuts, to help push the budget back responsibly towards the black while still supporting people and investing wisely for the future.
We've also advocated making wise investments that will support people and boost our economy over time.
Lifting Newstart $50 a week will immediately see money flowing back into the economy, setting up a Denticare scheme will bring down healthcare costs over time, and investing the extra billions in education suggested by David Gonski would do more than anything else to build a smarter Australia.
The government, on the other hand, wants to get to surplus this year by pulling $40 billion out of the economy. That could lead to a serious economic contraction in south-east Australia, driving even more job losses and making life harder for Australians while letting hugely profitable big businesses off the hook.
IMF chief Christine Lagarde says that flexibility in getting back to surplus is the key so that we avoid extreme outcomes. The list of senior Australian economists and business people agreeing with the Greens that a surplus this year at all costs is not wise includes Shane Oliver, Saul Eslake, Heather Ridout and many more.
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