May 7, 2014

OECD points to sensible fiscal policy, not ‘budget crisis’

New data from the OECD shows that Joe Hockey's supposed "budget crisis" is a lot of hooey, write Bernard Keane and Glenn Dyer.

Despite the “don’t cut hard” headlines, the message from the OECD’s Economic Outlook, published overnight, is positive for the Australian economy, and once again demonstrates how Treasurer Joe Hockey’s “budget crisis” is a myth.

In particular, the Organisation for Economic Co-operation and DevelopmentĀ sees the economy in a considerably healthier state than Hockey tried to portray in December, when he released the Mid-Year Economic and Fiscal Outlook. The OECD forecasts 2.6% growth in calendar year 2014 and 2.9% in calendar 2015. That’s far closer to the forecasts made independently of any politicians by the Departments of Treasury and Finance in the Pre-election Fiscal and Economic Outlook document, prepared in August last year, than MYEFO: PEFO had growth at 2.5% for 2013-14 and 3% for 2014-15, but Hockey downgraded that to 2.5% and 2.5% in MYEFO, which along with his big downward revisions to nominal GDP, substantially increased the forecast budget deficit for next year. The September and December quarter GDP numbers, in fact, suggest the economy is travelling much closer to 3% than 2.5%, which might explain why, as at February, the budget deficit was tracking $3 billion below expectations for the first eight months of the year.

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7 thoughts on “OECD points to sensible fiscal policy, not ‘budget crisis’

  1. zut alors

    Foolish Hockey, he made the fatal mistake of reading his own press releases on the woeful state of Australia’s economy.

    He repeatedly berated the former government for landing the nation in Debtors’ Prison &, at some point, it appears he lost sight of reality & actually fell for his own nonsense. Now it’s stuck like s**t to a blanket and there’s no chance for a dignified retreat.

  2. AR

    My favourite quote from Sloppy in the last two years was that “… labor was leaving the economy a smoking ruin”.

  3. MJPC

    “With any luck, Hockey will be sensible next Tuesday” and, with any luck I will win OzLotto; both eventualities unlikely.
    The Libs cannot help themselves. Get in on a scare campaign (or create one), then screw the workers and underprivileged to help their mates up the totem pole by whatever means available.
    Welsome to what was a fair society.

  4. EmuBob

    Surely no-one would be surprised. The mendacious, empty, slogans-for-bogans strategy that worked so well in getting phony Tony elected, will be seen in future to have characterised the entire disastrous Abbott government. What we see here is sloganomics.

  5. CML

    In the medium to long term, the blame game (its all Labor’s fault) will be seen for what it is – nonsense! Hopefully everyone ‘gets it’ before the next election.
    We cannot afford two terms of this ‘wreck the joint’ government.

  6. Tyger Tyger

    Guaranteed if things don’t turn out half as bad as the MYEFO outlook, Joe and co. will spruik what a great job the government’s done to avert “the crisis”. Of course, if it all backfires and becomes a self-fulfilling prophecy as BK & GD suggest…
    One thing’s for sure, the more radical the budget, the harder it will be to blame the previous govt if the economy does go south. It’ll be a case of, “You’ve made your bed, now lie in it.”

  7. klewso

    A pregnant pause, for Toady and Joe Shonkey’s over-egged “Magic Puddin’ Club”.

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