Australia `Fetish' for Surplus Should be Ditched on Floods, McKibbin Says

The Australian government should borrow money to pay for rebuilding from flood damage instead of imposing a one-time levy on taxpayers to fund the effort, said Warwick McKibbin, a member of the Reserve Bank of Australia’s board.

“Borrowing is a far better strategy,” McKibbin, a professor at Australian National University, said today in an interview on Bloomberg Television in Canberra. “This is a classic example of where a government should borrow. We have room to run deficits in the short term. That’s what we should do.”

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