18
May
2016

Will there be Real Budget Tests Available Publicly before the Election?

Today’s Financial Review has published my letter (see below) drawing attention to the importance of providing analysts with an accurate picture of the effects on the budget of policy announcements by both major parties. Separately, the AFR has reported (also shown below) that the Treasury will actually publish its assessment of the budgetary effects on Friday. But one question is whether sufficient detail will be provided to allow a meaningful analysis of for example the extent to which Federal government expenditures are drawing on national resources and further adding to the higher tax burden which the 2016-17 budget already proposes. Similarly, will we be provided with revised estimates of the deficit and (the likely) higher debt levels?

The article claims that there will be no input to the Treasury analysis by the government, thereby indicating that the Treasury assessment will be made independently. But there is a further question as to whether this will be the last analysis of the budgetary situation before the election on 2 July. Given the comparatively long period of electioneering after this coming Friday, and that  additional polling may well show a likely election winner, it is almost certain that there will be further policy announcements during this period on expenditure and/or taxation. It is in the public interest (and properly considered, their own) for at least the major parties to agree on asking Treasury for a further analysis of the budgetary situation close to the election.

The Financial Review makes no mention of the role of the Parliamentary Budget Office (PBO) which Shadow Treasurer Bowen has previously said is the only agency to which it will submit Labor’s budget assessment. However, The Australian has published a lengthy article on the PBO indicating that the PBO has already done a lot of “costings” of Labor’s policies (presumably the Coalition’s costings in the Budget are largely accepted ), although it is not clear from the article  whether the PBO will be publishing anything on Friday. Nor is it clear if any further budgetary costings by the PBO will become available publicly after Friday. It is important that such costings are made available publicly given in particular that the article reports that Labor is planning to “unveil multi-billion dollar spending initiatives through the election campaign”. It may not be the only party taking such “initiatives”.

Let us hope that close to the election there will be  reasonably accurate budgetary situations available for both the Coalition and Labor.

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