Jessica Irvine writes that Australia is faced with an aging population and spiraling health costs, but a free-spending government will leave us unprepared.
Two veteran Budget forecasting groups, Deloitte Access Economics and Macroeconomics, have in recent days delivered their verdict on Mr Swan’s mid-year Budget update: It’s codswallop. The Federal Budget is not in surplus by $1.1 billion this year but in deficit by $4.2 billion, according to Deloitte, and $7 billion, according to Macroeconomics…..
via We're afflicted with the same fiscal flab most governments struggle with | thetelegraph.com.au.
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Sounds like the other two sources are talking about some sort of structural deficit calculation, whereas Swan is going for the nominal figure, which can be window dressed using creative accounting methods like pushing expenditure into different financial years etc.
Having said that, the terms of trade and other macroeconomic aggregates are so variable, even calculations to the last billion dollars is pretty ridiculous I think. In that, Swan seems to have created a rod for his own back. I mean all he had to do was say “look at Europe” and “look at the US” etc and point out that in comparison Australia doesn’t really have that level of a problem. Nevertheless, setting more robust goals for fiscal discipline does seem to be a good idea I think.