Today's Economic Statement has me a little perplexed. In this post I will focus on the fiscal side of the statement.
Let's start with the government revenue and expenses (from Table A1 on page 48). The statement suggests that expenses will start a little higher than the government estimated just some 10 weeks ago, but will end up much the same as projected 10 weeks ago.
Compared with the Budget estimates of 10 weeks ago, we see revenues down $7.8b in 2013-14, down $14.1b in 2014-15, then recovering in 2015-16 to be down only $5.0b, and down $7.8b in 2016-17. I must admit, I find the projected 2015-16 recovery implausible.
The fiscal balance turn-around in 2015-16 is similarly implausible. It is reminiscent of the turn around projected for 2012-13 that eventually evaporated.
Intriguingly, while the Treasury has forecast a collapse in Commonwealth revenues, GST receipts will power on a little improved compared with the Budget estimates of 10 weeks ago (table 7 page 35). This juxtaposition looks like another implausibility.