Treasury Secretary Ken Henry turned up at Wayne Swan’s press conference to check out how his new boss performed.

Relations between Treasury and Peter Costello soured badly in recent years and Swan is said to be getting on well with the boffins as the bean counters assume a more powerful position in the Rudd Government.

Swan was so keen to talk down the revenue boom from China, so you have to wonder how the latest Treasury forecasts will stack up.

After all, Treasury has an appalling overall record in predicting the budget surpluses in recent years which is best demonstrated by this table tracking the 11 most recently completed financial years:

If Treasury continues its 11-year average of under-cooking the budget outcome by $4.47 billion, today’s $21.7 billion surplus prediction for 2008-09 will actually finish up at $26.17 billion.

That would go some way towards satisfying Labor’s nation building dreams, but you shouldn’t forget that our federal government is only just moving into a positive net worth position.

China, the country which is driving our record revenues, has $US1.8 trillion of foreign reserves, so Australia’s balance sheet remains pathetically weak by global standards.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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