Tuesday, 19 May 2015

A public service to Catallaxy

Yesterday Katsey didn't have a clue about PEFO and MYEFO. What made it worse was no-one else did either.
Sinclair Davidson finally put up his head to declare that maybe perhaps PEFO were better figures. However HERE he tries to imply there is much of a difference between the two.

He says this "Alberici is in a perfectly legitimate position to suggest that she prefers the information contained in PEFO (apparently non-partisan) over the (probably partisan) information contained in the MYEFO. That is not inherently a Labor argument. That is the policy design and intent that the Howard government had when it established the Charter of Budget Honesty."

Now if we take this at face value then Davidson doesn't quite understand what the essential difference is.

A statement by the Secretaries of Treasury and Finance would be seen by any person as non-partisan as they are NOT under any Government direction. On the other hand MYEFO is under Government direction and given the short period between the two documents a substantial amount of direction was given.
 I have outlined the differences previously HERE.
To quote myself:

The only changes to PEFO and MYEFO are:
  • Changes in Government policy
  • Changes in economic parameters

As I said about the MYEFO at the time the main changes to the deficit was Government decisions not changes in economic parameters.. Yet the Government as exemplified by Cormann was blaming the Previous ALP Government for their own spending decisions outlined in MYEFO.
It is seen at its worst in the blatantly political Inter-Generational report.

The ALP record  on leaving can only be seen by the PEFO figures and never by the  MYEFO figures. If a person does not understand that then they should go to University and study economics and enquire about how to interpret budget documents.

UPDATE:

A person has e-mailed /rebuked me for not outlining that GROSS debt must increase each year every year because of the BASEL rules that increase the number of bonds issued. see HERE