Cut the waste and expand investment

Perpetual Equity Investment Company

Perpetual Asset Management (Australia)

Cut the waste and expand investment. While our government debt at 19% of GDP is well below that if the global average (73%) one could hardly say that the global average is an inspiring target. The key for Australia is that with the terms of trade coming off and the housing market looking over-heated, the policy response to a short-term growth problem in Australia (which is a growing risk) will have to be on the fiscal side where spending will have to increase to support ailing demand. The key here is cutting the parts that need to be cut (including social security to those earnings above-average wages, incentives to high income earners to do things which are compulsory and removing intergovernmental waste) and expanding the parts which need to be expanded which is the investment side, as this has the largest economic payoff and culminates in a more sustainable growth outlook. There is no doubt that domestic Budget repairs are needed and the best time to repair our leaking roof is when the sun is shining.


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Perpetual Asset Management (Australia)

The Perpetual Equity Investment Company Limited is an ASX listed investment company offering investors access to a portfolio of predominantly high quality Australian and global listed securities, selected by Perpetual Investment Management Limited.

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