We present this graph as an to addendum today’s Mid-Year-Economic Fiscal Outlook.
Each December, MYEFO is a chance for the government to take another look at the May budget and make adjustments based on the state of the economy. These are usually in the form of cuts based on a slump in predicted revenue — and today’s MYEFO is no different.
For several years now, Treasury has been anticipating a far more rapid post-global financial crisis revenue recovery than has actually eventuated. As the graph shows, since 2008, Treasury’s revenue forecasts have far exceeded actual revenue.
Treasury needs to accept responsibility for the role it has played in what is now many years of poor forecasting, and start offering a more realistic forecast window for treasurers. Otherwise Scott Morrison won’t be the last to have to stand up and explain why the budget deficit has blown out — yet again.