Swan’s central proposition is correct, and for that reason there is a limit to the political mileage the opposition can extract.
As the September quarter national accounts confirmed, the economy is now running well below its long term growth trend. The annualised growth rate during the quarter was only 2 per cent, and the government’s tax receipts in the first four months of the year to June were $3.9 billion lower than estimated.
The hole has mainly been caused by lower commodity prices and competitive pressures on the economy that are partly related to the refusal of our dollar to follow commodity prices down, but Swan has taken the advice of experts including the OECD and decided against finding spending cuts or new revenue to try and fill it.
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