A further point to add here is that even maintaining a balanced fiscal position on a daily basis would not ensure these effects would be avoided. Even with the fiscal position in balance, the system could be destabilised by changes in the public’s demand for currency.
Because the public’s demand for currency expands with the growth of the economy, it could only be accommodated in this regime by some other source of cash such as provided by RBA open market operations. Failing this, there would be continuing upward pressure on interest rates and economic contraction.