In 1998, the then Treasurer Peter Costello, introduced the Charter of Budget Honesty to give greater transparency to the government’s management of fiscal policy.
The incumbent government was now required to provide a Pre-Election and Fiscal Outlook (PEFO) report during the caretaker period. This PEFO report (which is, incidentally non-political) was submitted just before the last federal election.
The report showed a deficit of $30.1 billion deficit for the financial year 2013-14 but a return to surplus over the forward estimates by 2016-17. This, however, did not suit Joe Hockey who then proceeded to add 16.9 billion to the deficit as shown in his December Mid-Year Economic and Fiscal Outlook.
His figures projected a deficit of $17.7 billion for the year 2016-17.
The strategy was obvious: extend the debt so that the electorate will swallow the fallacy of a budget emergency and give the Coalition a 'mandate' to govern well into the future.