Description: argues that fiscal policy in Australia is shifting away from being used as a tool of macroeconomic management towards being used as a political tool.

The stance of fiscal policy has changed significantly over recent years. Fiscal policy involves the use of the Commonwealth Government's Budget in order to achieve the Government's economic objectives. The Howard Government's primary fiscal objective has been 'to maintain budget balance, on average, over the course of the economic cycle'. This infers using fiscal policy as a tool of macroeconomic management: deficits during recession years, and surpluses during years of higher economic growth. During its first two terms in office the Howard Government used fiscal policy as part of its macr…