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29 / 36

2000-01

0.6%

2001-02

1.2%

2002-03

1.5%

2003-04

-0.3%

2004-05

-1%

2005-06

-2.3%

2006-07

-2%

2007-08

-1.9%

2008-09

-1.5%

Australian Federal and State Budgets – An Overview

Western Australian Government Sector Net Debt (as a Ratio of Gross State Product): 2000-01 to 2008-09 78

21

10 COMMENTARY

The recessions of the 1980s and the 1990s marked a momentary turning point in fiscal policy in a number of OECD countries, including Australia. As P. Alonso- Gamo and his colleagues have summarised it:

[with the] sharp decline in economic activity in 1981-82, fiscal policy was generally tightened. . .in most European countries and Japan. By 1989 the average deficit for the OECD area as a whole was down to 1.4 per cent [of GDP]. . .Eight countries – Australia, Finland, Germany, Japan, Norway, Switzerland and the United Kingdom – were in balance or in surplus. 79

Government

Mid-Year Financial

Projections

Statement:

2001-02,

p.18;

WADTF,

Government

Mid-Year Financial

Projections

Statement:

2002-03,

p.12;

WADTF,

Government

Mid-Year Financial

Projections

Statement:

2003-04,

p.17;

WADTF,

Government

Mid-Year Financial

Projections

Statement:

2004-05,

p.17;

WADTF,

Government

Mid-Year Financial

Projections

Statement:

2005-06,

p.18;

WADTF,

Government

Mid-Year Financial

Projections

Statement:

2006-07,

p.18;

WADTF,

Government

Mid-Year Financial

Projections

Statement: 2007-08

p.19;

WADTF,

By 2001, as Fred Argy (former Australian ambassador to the OECD in the 1980s and later president of the Economic Society of Australia), observed “Australia remains in essence a small government country: it has a low overall tax burden, low public debt levels, and low government outlays relative to GDP by comparison with other OECD countries.”80 Argy’s observations have recently been borne out in a graph produced by Shane Oliver (of AMP Capital Investors) as reproduced below81:

78

WADTF, Government Mid-Year Financial Projections Statement: 2000-01, p.25; WADTF,

79

P. Alonso-Gamo, M. Maher, John Martin, G. Nicoletti and H. Oxley, The Public Sector: Issues for the 1990s (Organisation for Economic Co-operation and Development, Paris, 1991), p.2.

80

Argy, n.35, p.8.

81

Shane Oliver, Oliver’s Insights: The Greek Debt Debacle (AMP Capital Investors, Sydney, 2010), p.2.

WADTF,

p.17;

Government Government

Mid-Year Financial Projections Statement: 2008-09, Mid-Year Financial Projections Statement: 2009-10, p.20.

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