Graph 4  As has been the case globally, we had our own country-specific factors that have temporarily weighed on economic growth, including the drought and some disruptions to resource production and exports. More fundamentally, though, the main reason for the shift in momentum in the Australian economy is a slowdown in household consumption growth.
In order to restore confidence in public finances, fiscal policymakers must now show that they are able and willing to improve their structural budgetary position. Although fiscal consolidation is hard, it is unavoidable in a debt crisis – constantly deferring the necessary measures will only increase uncertainty and thus likewise dampen growth.