Australian PM brushes off IMF call for fiscal restraint
Australian Prime Minister John Howard brushed off an IMF call for fiscal restraint, days after he promised billions of dollars in tax cuts if re-elected next month.
By Agencies |
SYDNEY: Australian Prime Minister John Howard on Thursday brushed off an IMF call for fiscal restraint, days after he promised billions of dollars in tax cuts if re-elected next month.
As Opposition leader Kevin Rudd took up the International Monetary Fund's report to warn of a planned government "spendathon", Howard insisted its latest World Economic Outlook was instead an endorsement of his 11 years in power.
The IMF warned that controlling inflation was Australia's biggest challenge in the near future and urged fiscal restraint.
"The IMF was in effect encouraging us to continue our current policies," Howard told journalists in Brisbane. "We will continue a strong anti-inflation policy as we have in the past."
In its economic outlook, the IMF noted that Australia's economy had been hit by recent turmoil on world financial markets, triggered by the subprime mortgage crisis in the United States.
It forecast 2008 inflation of 2.8 percent, at the top end of the central Reserve Bank of Australia's two to three percent target range and predicted Australia's economy would grow by 4.4 percent in 2007 and 3.8 percent in 2008.
"Against this background, it is important that both governments continue to exercise fiscal restraint in the period ahead," it said.
It comes days after Howard and his anointed successor as prime minister if reelected, Treasurer Peter Costello, announced a five-year plan to slash taxes with planned cuts worth 34 billion dollars (30.3 billion US).
Rudd's Labor party has yet to respond in detail to the package but Rudd has said it risks fuelling inflationary pressure.
Former diplomat Rudd on Thursday stressed his own fiscal conservatism. "I will not be matching Mr Howard dollar for dollar for every promise he makes this election," he told reporters in Adelaide.
The government's handling of the economy is seen as one of its strongest vote winners in the campaign for the November 24 election, which polls predict it will lose in a landslide. Unemployment is at a 33-year low of 4.2 percent and the economy is booming.
In a bitter campaign, the government is playing hard on fears of trade union domination, running advertisements highlighting the trade union connections of many top Labor figures to suggest that Labor wants to turn back the clock on its economic reforms.
Earlier Costello also brushed aside the IMF report, saying it had also noted Australia's successes.
Costello, set to take over as prime minister in the next parliamentary term if the government should win the election, also said that growth forecasts had been reduced in view of the recent turbulence in global financial markets.
As Opposition leader Kevin Rudd took up the International Monetary Fund's report to warn of a planned government "spendathon", Howard insisted its latest World Economic Outlook was instead an endorsement of his 11 years in power.
The IMF warned that controlling inflation was Australia's biggest challenge in the near future and urged fiscal restraint.
"The IMF was in effect encouraging us to continue our current policies," Howard told journalists in Brisbane. "We will continue a strong anti-inflation policy as we have in the past."
In its economic outlook, the IMF noted that Australia's economy had been hit by recent turmoil on world financial markets, triggered by the subprime mortgage crisis in the United States.
It forecast 2008 inflation of 2.8 percent, at the top end of the central Reserve Bank of Australia's two to three percent target range and predicted Australia's economy would grow by 4.4 percent in 2007 and 3.8 percent in 2008.
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"Against this background, it is important that both governments continue to exercise fiscal restraint in the period ahead," it said.
It comes days after Howard and his anointed successor as prime minister if reelected, Treasurer Peter Costello, announced a five-year plan to slash taxes with planned cuts worth 34 billion dollars (30.3 billion US).
Rudd's Labor party has yet to respond in detail to the package but Rudd has said it risks fuelling inflationary pressure.
Former diplomat Rudd on Thursday stressed his own fiscal conservatism. "I will not be matching Mr Howard dollar for dollar for every promise he makes this election," he told reporters in Adelaide.
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The government's handling of the economy is seen as one of its strongest vote winners in the campaign for the November 24 election, which polls predict it will lose in a landslide. Unemployment is at a 33-year low of 4.2 percent and the economy is booming.
In a bitter campaign, the government is playing hard on fears of trade union domination, running advertisements highlighting the trade union connections of many top Labor figures to suggest that Labor wants to turn back the clock on its economic reforms.
ADVERTISEMENT
Earlier Costello also brushed aside the IMF report, saying it had also noted Australia's successes.
Costello, set to take over as prime minister in the next parliamentary term if the government should win the election, also said that growth forecasts had been reduced in view of the recent turbulence in global financial markets.
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