Scott Morrison Josh Frydenberg fiscal policy

The slump that set in in the second half of 2018 and which continues to dog the economy is a serious failure of policymaking, and one that may yet inflict much more substantial damage on Australia.

Yesterday's Mid Year Economic and Fiscal Outlook (MYEFO), in which the government significantly downgraded its growth and surplus forecasts, is an update of April's budget, but there's also an interesting comparison to be made with the MYEFO presented at the end of last year.

The forecasts in that document look like broadcasts from another planet: GDP growth of 2.75% for 2018-19 and 3% for 2019-20; wages growth of 2.5% for 2018-19, 3% for 2019-20 and 3.5% afterward; household consumption of 2.5% and 3%, business investment growth of 5% this year.