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2. Excluding interest payments. 6RXUFH OECD, (FRQRPLF2XWORRN No. 72, December 2002. The objective of the Commonwealth’s medium-term fiscal strategy is to maintain budget balance, on average, over the course of the economic cycle. e. current account). The medium-term fiscal policy framework safeguards the sustainability of public finances over time. It allows policy to react to short-term economic fluctuations to support growth, while ensuring that additional government spending in periods of weaker activity is made possible by savings during periods of stronger growth.
Call rate. 6RXUFH Australian Bureau of Statistics. © OECD 2003 1995 1996 1997 1998 1999 2000 2001 2002 4 Page 50 (1, 1) OECD Economic Surveys: Australia 50 Figure 14. International comparison of long-term interest rates Ten-year bond yield Per cent Per cent Australia New Zealand 10 Germany United States Switzerland Japan 10 8 8 6 6 4 4 2 2 0 1995 1996 1997 1998 1999 2000 2001 2002 Per cent 0 Per cent 4 4 Differential between Australia and United States 3 3 2 2 1 1 0 0 1995 1996 1997 1998 1999 2000 2001 2002 6RXUFH OECD.
2. Excluding GST collections and equivalent payments to the States. 3. Mid-Year Economic and Fiscal Outlook estimates. 4. Other withholding tax is also included. Source: Commonwealth Treasury of Australia. 3 per cent). 42 This implies a contractionary impact of around ½ per cent of GDP in 200203, in line with the expected strong continuing growth of domestic demand and recovery in international activity. In addition to the primary objective of maintaining budget balance, on average, over the course of the economic cycle, the supplementary objectives of the medium-term fiscal strategy as set out in the 200203 Budget43 are: – maintaining surpluses over the forward estimates period while economic growth prospects remain sound; – no increase in the overall tax burden from its 1996-97 level; and – improving the Commonwealth’s net asset position over the medium to longer-term.