Despite being labelled as “cruel” by political leaders, Reserve Bank governor Glen Stevens has called the federal budget “not that tough”.
Speaking to a parliamentary committee yesterday, Mr Stevens said that further reform would be needed to pay for the government’s generous spending.
“I did not think, really, that the budget was that draconian, frankly, in a macro-economic sense,” Mr Stevens said.
“We as a community have decided we want to do some very big and very costly and very good things in the public space but we haven’t actually taken the decisions to secure the funding for those things, so far as I can see.”
The comments come as the Coalition government struggles to pass some of its key budgetary savings measures, including the $7 co-payment for GP visits.
Deloitte Access Economics director Chris Richardson warned that the need for savings was “a priority”, according to a report by The Australian.
Mr Richardson said there was a “bigger risk than people realise” that growth in China would slow, and that Australian taxpayers would have to accept painful spending cuts.
Greens leader Christine Milne said that the measures were “cruel”, and called on higher taxes on mining, while Labor leader Bill Shorten said that pensioners and families would be hurt by the “unbelievably tough cuts”.
Mr Stevens warned that if Australia didn’t act on fiscal reform now, draconian measures would be “forced” upon the country later.