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Govt caught short on economy and drought

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The Morrison government got caught out twice this week on its hubris and rhetoric, on the state of our economy, and on the drought.

The slogan that "Our Economy is Strong" was blown out of the water when the IMF significantly lowered their forecast for our growth in 2019, far less than growth in 2018, and at 1.7 per cent, the lowest rate since the GFC.

It certainly didn't ring true for the government to respond by simply claiming that we have had some 29 years of growth, and that they "had a plan" which they were implementing.

Their "plan" is cuts in official interest rates, personal tax cuts, and the promised budget surplus - the first two having had no stimulatory effect yet, and the third apparently going in the wrong direction and against the Reserve Bank's call for budgetary stimulus. The government also mentions its $100 billion infrastructure agenda, but none are "shovel ready", nor funded.

Beyond this, Treasurer Frydenberg seemed to blame the IMF growth downgrade on the "synchronised slow down" in global growth but, while not denying the significance of the global risks to our growth, it must be noted that so far our external accounts have been working to sustain........

© Canberra Times