Official figures show the Australian economy, if not grinding to a halt, posting a 1.4 per cent annual rate of GDP growth, the slowest in a decade.

This sparked renewed calls for fiscal stimulus from the government. With interest rates already at a record-low 1 per cent, there is only so much more that RBA governor Philip Lowe can do with monetary policy.

There are currently two challenges, however, in achieving fiscal stimulus in Australia. The first is the government’s near obsession with returning the budget to surplus. Returning to surplus makes a great deal of sense in good economic times, and is a welcome sign of good management in those times. But it is exactly the wrong response to an economic downturn. As the events of 2008 showed us, downturns often require rapid and large-scale government spending to prevent a full-blown recession. And if that means a temporary—rather than permanent—hit to budget balance, then so be it.

But that is not yet a narrative the government has been willing to embrace. Any hopes that the government would register a “proof of concept” return to budget surplus this year and then focus on boosting GDP growth was dashed by Prime Minister Scott Morrison’s remarks to NSW Liberals. He made it clear that ongoing surpluses were at the heart of his economic plan, saying: “It's taken us 12 years— six in our own making—to get this back into surplus this year ... We are only in our first surplus year and Labor is already wanting to spend it all in an afternoon, flailing their hands about like they did last time when Australia went into difficult times.”