The Rudd Government has succeeded in walking the tightrope between curbing inflation and investing in nation building, perched on a platform of economic uncertainty, according to professional services firm Deloitte.

Dr David Charles of Deloitte Economics said the Federal Government has demonstrated it is a prudent economic manager while launching major nation building initiatives and packages to assist working families.

“Business will welcome the strong economic discipline. The numbers look impressive: $21.7 billion surplus, well-exceeding the promise of 1.5% of GDP,” Dr Charles said.

“The Budget is built around realistic macroeconomic forecasts ─ a modest 2.75% growth for 2008-09, by the end of the year inflation of 3.25%, and unemployment rising from 4.2% to 4.75% in that period.

“The savings measures across the budget send a loud and clear message of conservative economic management. Cuts of $7.3 billion eclipse new expenditure of $5.3 billion, again exceeding market expectations.”

Dr Charles added that there appears to be a convergence of views held by the government and the Reserve Bank.

“This budget does as much as possible to give business the confidence to plan in global uncertainty. It also reflects a down payment on the productivity agenda.

“It must be emphasised that in the wings are major reviews on collection and use of public monies.

“Future funds have been stashed away to address business’ major objectives of infrastructure, skills and education, and health.

“The clock is now ticking as to whether the Rudd government can deliver on these nation building initiatives.”