Oakeshott urges more stimulus

Independent MP Rob Oakeshott wants the government to loosen the purse strings and start a third round of stimulus now Labor has all but abandoned its promised surplus next year.

Treasury had forecast in October a $1.1 billion surplus for 2012/13, a turnaround from a $43.7 billion deficit the previous year.

The Finance Department's latest monthly statement released on Thursday showed cash receipts for 2012/13 so far totalled $111.6 billion at the end of October, down almost $4 billion on expectations.

The main factor was company tax revenue, hit by profit declines.

Treasurer Wayne Swan on Thursday said he'd rather ditch the surplus than tighten fiscal policy further and risk local jobs and growth.

Mr Oakeshott applauded this move but wanted the government to go further.

"Unless there is a bumper summer, unless we really can see some increase in consumer confidence and consumer spending I do think the conversation in the first quarter next year will be one about whether to stimulate the economy with a third round of stimulus," he told ABC radio on Friday.

Labor backbencher Doug Cameron cautioned Australia needed to learn from Europe, where austerity drives had taken many countries' economies backwards.

"We should not be out there arguing fiscal austerity when there are major parts of the economy still in recession and still not recovered from the global financial crisis," he told the ABC.

Fellow independent MP Tony Windsor doesn't see the loss of a surplus as a problem either.

"To focus on the word surplus as being the determiner of being a good economic manager, I think, has always been flawed," he told ABC radio.

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