news, federal-politics

Britain's exit from the European Union would cause "a degree" of global economic uncertainty, Prime Minister Malcolm Turnbull has warned. And he has used the prospect of an economic "shock" caused by Brexit to make the case for the re-election of the Turnbull government. But Finance Minister Mathias Cormann has repeatedly declined to say if the federal government would pump up government spending – and potentially increase the size of the deficit – to support economic growth in Australia in the event of a global economic slowdown triggered by Brexit. When global economic conditions slow, it has been the orthodoxy in Australia for governments to spend more and support the economy. Australian shares tumbled on Tuesday as nervous investors dumped equities for less risky bonds and gold amid growing fears Britain will leave the European Union. And a series of recent opinion polls show the prospect of Brexit is increasing likely, ahead of a vote on Thursday week. Mr Turnbull said on Wednesday that while the decision to stay or leave the EU was a matter for the British people, if they did leave "that will cause a degree of uncertainty in global markets, and the anticipation of that is already doing that". "It is a reminder that we need to ensure that we have strong, committed, capable economic leadership, a stable government with a clear national economic plan," he said. "There are many things that occur in the global economy over which we have no control, there are many shocks that can occur ... strong economic leadership is critical, that is why the choice that Australians are making today and will be making every day up to 2 July is clear." "On the one hand, my government, strong economic leadership, stable Coalition government, a strong clear national economic plan, delivering jobs and growth ... on the other hand, we have a chaotic alliance perhaps, Labor/Greens/independents, bigger deficits." At an earlier press conference, Senator Cormann would not say if the Coalition would run an expansionary fiscal policy – that is, spend more money – in the face of a possible Brexit-driven slow down and insisted the Coalition's May budget was "our plan". "Our plan Is reflected in our budget, that is the plan we are taking to this election," he said. "Australians know exactly what the Australian government would do, we have put it out there open and transparently in our budget. It's the plan that will [give] us the strongest possible economic and fiscal foundation to deal with any global economic headwinds coming our way." Follow us on Twitter Follow James Massola on Facebook

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