Tuesday, 13 August 2013

PEFO and all that

Treasury and Finance released the Pre-election  Economic and fiscal Outlook 2013 ( PEFO) yesterday as is their norm during an election campaign.
It is little different to the Mid Year Economic and fiscal outlook released recently.

No-one should be surprised at this. Martin Parkinson did say both he and the finance Secretary would have prepared the same set of numbers for the budget  if they had PEFO guidelines at the ABE lunch he addressed after the budget..

Both parties did not have to wait for these numbers for costings to their policies.
The Government as is their wont could have used MYEFO to update anything they needed courtesy of treasury as they are the government of the day.

The Opposition, needing as much credibility as possible  after their disgraceful behaviour in the last election, could/should have used the Parliamentary budget office to cost their policies.This is easily the best thing any opposition has had in the past. Previously they had to find some organisation out there to do it for them at considerable cost. Even then some treasurers like Costello bullied those organisations so much they no longer provided costings to any party after that.

I do hope Hockey gives up his absurd claim that the Government has 'heavied' Treasury to make the forecasts they have in the past. It makes him look really silly and quite stupid. If he becomes Treasurer he needs Treasury working for him unworried about possible threats to anyone.

It is quite apparent the major problem on the fiscal front is the wasting of the resources boom on income tax cuts as well as the ending of the excise tax on petroleum has caused major problems with regard to Revenue. We looked at this problem here .

This problem does not go away as nominal growth comes back to trend levels. It also makes estimating revenue quite hard.

I have yet to see this permeate either side of politics as yet.

UPDATE

I notice via M0nty Sinclair Davidson has yet to give us a reason why cash rates are falling if government expenditure is the problem. Don't hold your breath. Mind you this is a subject he has as much a clue about as Katesy!