"But he got sucked into promising a surplus when he shouldn't have,"
Yeah I agree with you cgt,
Peter Costello confesses: a lesson in revisionism and politicking
So, we finally have a mea culpa from the treasurer that oversaw the creation of the Australian credit bubble. Australia’s growth would absolutely be akin to other struggling Western nations without the mining boom. But Costello neglects to recall why. Western nations are suffering balance sheet recessions. That is, following the GFC, the value of their assets fell, whilst the value of their liabilities increased. Thus, they find themselves in various forms of liquidity trap, deleveraging cycles and the rebuild of savings. This was the result of their decade long booms in credit, asset speculation and over consumption to drive growth.
As treasurer, Costello presided over and encouraged precisely the same model of economic growth. Let’s take a quick look at the credit aggregates under his watch (I’ve shaded his tenure):
