Finance Finance News Westpac’s Kelly backs tough love budget

Westpac’s Kelly backs tough love budget

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Westpac chief executive Gail Kelly says Australia needs tough spending cuts to deal with a rising deficit.

Unlike ANZ boss Mike Smith, who last week criticised a proposed new tax or deficit reduction levy he said would damage confidence and entrepreneurialism, Mrs Kelly would not comment on proposed government policies.

However she rejected the suggestion that any budget upheaval, whether it be taxes on workers earning about $80,000 or cuts to nearly all government agencies, would hurt an already fragile economic recovery.

“We all know it’s going to be a tough budget, it has been well flagged and it needs to be a tough budget,” Ms Kelly told reporters on Monday.

“The fiscal deficit issue we have is proving to be quite intractable.”

In relation to confidence, budget measures tended to have medium-term element to being rolled out, giving people time to absorb them and deal them into the economy, she said.

Ms Kelly said she liked the Business Council of Australia’s Jennifer Westacott’s view that budgets should contain four planks to deliver: economic growth; efficient expenditure and revenue and good social policy including skills training.

“Ultimately if the economy grows, that is good for us all so what can the budget do that takes away road blocks?

“You really do want to make sure our youth have appropriate skills training for jobs into the future.”