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A strong fiscal stimulus is necessary without which the economic recovery is likely to falter, the Australian Treasury Secretary Steven Kennedy said in an interview with the Guardian on Friday.

Key quotes

“The move would allow the government to boost the economy whenever it is flagging rather than just after a “large shock” such as the pandemic.”

“Given the lack of conventional monetary support available, the recovery could falter without a strong fiscal policy response leading to years of anaemic growth.” 

“Fiscal policy has always responded to large shocks but there is now a question about whether the threshold for intervention should be lowered.”

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