31 May 2014

Hockey cooking the books?

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. 
Frank Carroll

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