Budget has $100b hole Surplus still based on false hopes

2018 COMMONWEALTH GAMES HOST CITY and budget expert Jeremy Thorpe.

Deloitte Access economist Chris Richardson said since the global financial crisis, budgets overseen by both political parties had assumed that rapid returns to normal levels of economic activity would cover increased spending and pay off debt. But time and again the predictions had proven wrong.

“Albert Einstein famously noted that insanity is doing the same thing over and over and expecting different results,” Dr Richardson said.

“After moving the date for the ‘return to surplus’ another year time and time again, and doing so without changing any of the underlying assumptions, are we not all a little insane?”

The Budget bottom line has been further compromised by savings plans failing to pass Parliament. Deloitte Access estimates Senate delays will increase spending by $810 million in 2017-18.

And if the Government can’t get the nod for measures first proposed as far back as 2014, there will be further hits of $3 billion in 2018-19 and again in 2019-20.

Mr Thorpe said: “The Government’s continuing reliance on such unlegislated measures … reinforces the message that the Budget headline is being massaged for a positive headline rather than painting a true sense of the national government’s fiscal position.”

The cost will be met by the next generation, said Dr Richardson, adding: “Young Australians haven’t realised the most prosperous generation that Australia has ever seen is running up the credit card and stiffing them with the bill.”

Asked to explain the $100 billion deterioration, a Treasury spokesman said it was mainly due to “the impact of changes in the economic outlook” which had cut revenue by $135 billion.