TIME FOR A REALITY CHECK ON BUDGET FORECASTS

The Tasmanian Greens today said this year’s State Budget had again shown why Federal Treasury GST forecasts were an unreliable basis for sound economic planning.

Greens Treasury spokesperson Tim Morris MP said that flawed GST modelling over the past decade had led to consistently over-exaggerated revenue forecasts for state governments around the country.

“Every year we get another fairy story from Federal Treasury about sudden growth in GST revenue being just around the corner,” Mr Morris said.

“These consistently exaggerated predictions are designed to create an appearance that we will have rivers of money in just a year or two, but they cannot be solely relied on for sensible State Budget planning.”

“The Liberal Party is the worst offender here, because while they criticise the budget going into deficit, they base their own fanciful spending promises on over-exaggerated claims about future revenue.”

“The reason we have a deficit this year is simply that GST receipts have not met the predicted revenue in the forward estimates in the past few years to cover our expenses, compounded by external impacts such as the high Australian dollar.”

“If we continue to use inflated forward estimates as the basis for spending decisions, then we will only get increasing deficits and be slower to get back to surplus.”
Tim Morris MP Greens Treasury Spokesperson Tuesday, 28 May 2013