Mr Eslake, the chief Australian economist at the Bank of America Merrill Lynch, spoke to 200 people at the Rural Finance Federal Budget Dinner in Bendigo last night. 

Before the meeting he said the high Australian dollar would continue to cause concerns for several years, but that Australia’s economy was travelling reasonably well in trying times.  “Particularly in regional areas the strength of the currency will continue to be a problem for as long as it stays at fairly high levels,” he said. 

“Even though in the last week it’s fallen back below parity with the US dollar, I’m not convinced that this is the beginning of a big move down that many people in rural areas would want to see. 

“The strength of the currency will continue to be a problem for agricultural interests, for local manufacturers competing with imports, and for higher education bodies that depend increasingly on attracting people from local counties to study. I think in two or three years time the dollar will be weaker than it is at the moment.”

Mr Eslake spoke on the federal budget about the same time the opposition was delivering its response. 

He said the government had been right to spend less on the back of lower tax income and deserved credit for attempts to reduce spending in the long term. 

But he said the government had “blown a hole in its plan to return to surplus,” and had been wrong to assume the mistakes it had made would not happen again. He  said it had made “a number of surprising political misjudgements”. 

Mr Eslake said that while he welcomed paid parental leave, the Coalition shouldn’t be taking money from large businesses to essentially give to smaller businesses under the plan. 

He said the opposition had also been reluctant to outline plans that wouldn’t be popular with the electorate. 

Rural Finance chief executive Rob Goudswaard said last night’s event was a great opportunity for Bendigo residents to hear Mr Eslake’s insight into the budget.