Australia should start exit from stimulus now but gradually!

Comments on Michael Stutchbury “Unwind the stimulus”, 8/09/2009, http://blogs.theaustralian.news.com.au/currentaccount/index.php/theaustralian/comments/unwind_the_stimulus/

Michael Stutchbury is completely correct in arguing for unwinding the stimulus. The government should do it now and exit gradually from its stimulus.

The government should and must start to mind down its stimulus to the economy. The Treasurer, the Prime Minister and other government figures are wrong in saying that the opposition leader Turnbull is a loner in arguing for exit.

He is not and whatever the G20 or IMf have said recently cannot be used against him. This is because while the G20 or IMF said may be applicable to the average scenario of the world economy, or most industrialised economies, they are not applicable to every economy and Australia is such an economy.

If the government wants to be economically responsible and conservative, it must act now to exit the stimulus. It must have its own brain as opposed to simply and mechanically follow what the G20 or the IMF say for the world average scenario.

The government should and must put politics aside otherwise its reckless spending will come back and bite it in the future.

While it may not always be very easy to exit, there are ways to do it. Even for the school spending, it can relax the requirement for school halls or libraries and change to other more needy, useful and productive purposes and give schools longer time to complete them without forfeiting any schools' entitlement.

It can adjust its stimulus measures and at least the timing of some projects so to reduce their short term stimulating impact and be also more productive and less costly.

Politically, it would also reduce the government's vulnerability in terms of being attacked for inefficient and wasteful spending, and increasing budget deficits and debts unnecessarily.

Doing exit from stimulus can only benefit Australia and the government and do no harm to either. So why not do it and start now?

That is common sense. The government should heed it closely.