Australia could be headed for a recession

There’s a bit of pressure on the Turnbull Government to get the budget back to surplus in the next three years, after it was revealed the country could lose its Triple A credit rating, yet finance minister Mathias Cormann doesn’t want to commit to a final deadline for when it might happen.

“We need to make decisions that are both fiscally and economically responsible,” the minister told Sky News on December 11.

Although the mid-year budget review won’t get handed down until December 19, figures released recently showed the country’s economy had contracted for the first time since March 2011, by 0.5 per cent. However, Cormann denies any indication Australia is headed for a recession.

“I completely reject your proposition that we are in a recession right now, that is just false,” he told Sky News.

He also ruled out the Government undertaking any stimulus spending to boost the economy.

“We don’t believe it is sensible to pursue so-called stimulus spending,” he said, reflecting on the Rudd Government’s decision to do so in 2007-08.

“Labor pushed that sort of approach when they were in government and it clearly caused damage to the Australian economy…”

Cormann says the Government has demonstrated discipline to ensure that Australia does not “go backwards” as a result of the policy decisions it is making.

How important do you think a budget surplus is to the Australian economy? What economic issues do you think the Government should be focussing on? Share your thoughts with us.