“Monetary policy cannot be the only game in town. It should be coupled with fiscal support,” said the IMF last week. The government is facing added pressure from the RBA and corporate Australian to inject more spending into the lagging economy.
But Mr Morrison is holding firm to his election promise of a budget surplus this year. With lower rates proving ineffective, QE is widely anticipated as the next lever to stimulate growth. But, as overseas experience has proved, it has its limitations.
We sat down with Adam Bowe, Portfolio Manager at PIMCO Investment Management to talk about the lagging economy and the elephant in the room: by eschewing discretionary fiscal stimulus, is the Morrison government playing politics over plain economic sense?
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