Turnbull said that that excessive borrowing started to be a problem from 2005. “It kind of crept up on us in 2005, 2006, 2007, and we were still expanding public spending at 4.5 percent a year,” he said, arguing that the Treasury should have been putting more money aside. “You might have thought that we should have been giving priority to getting borrowing under better control, putting money aside in the good years – and it didn’t happen,” he commented.
Turnbull said that “there were some other places that had begun to accumulate surpluses for a rainy day; places like Australia.”
While Turnbull argued that the primary reason Britain is “in the mess that we’re in” is because “public spending got too big relative to the productive resources of the economy, by error” he added that a loss of output caused by the financial crisis has also contributed to the budget deficit.
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