This week, mortgage holders were hit with more bad news as the Reserve Bank raised interest rates for the fifth time this year.

Businesses too are feeling the pinch, from increasing costs, high rates, and low consumer confidence.

Critics of the government call for policy changes, notably that public spending should be reined in to help fight inflation.

CEO of the Australian Chamber of Commerce and Industry, Andrew McKellar, joined us on the podcast to discuss ACCI’s prescriptions for the country’s economic ills, some of it very strong and unpalatable medicine.

McKellar says first and foremost the government should set out strong fiscal rules:

We need to say that we need to balance the budget on average over the course of the economic cycle. We need to pay down net debt more than we are currently projected to do. Now is as good a time as any for the government to send a clear signal to say, we heard the message, we understand that change is necessary, if that means we got it wrong in the past, we accept that we got it wrong, and we are going to change direction, we are going to set some really firm guidelines about this, and we are going to get the budget back into balance on average over the course of the economic cycle.

We need to say that we need to balance the budget on average over the course of the economic cycle. We need to pay down net debt more than we are currently projected to do.

Now is as good a time as any for the government to send a clear signal to say, we heard the message, we understand that change is necessary, if that means we got it wrong in the past, we accept........

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