This leads to excessive caution, which dampens economic activity. The consolidation of public finances is a key task for all levels of government.
For the past three years in a row, net borrowing in the Federal budget has exceeded the constitutional limit, defined as an amount equal to total investment expenditure, so that the Federal Government has repeatedly had to invoke the exemption clause by claiming that the macroeconomic equilibrium is temporarily disrupted. Many state government budgets are facing similar problems.