Jordan’s latest defence of the indefensible, namely the suggestion there is no money for tax cuts, is to say that the $6.5 billion surpluses we have had the last two years will not last, as the forecasts for future surpluses is lower, at around 3% of GDP.
Luckily when DEFU came out earlier this month, I was bored and went back through the last 12 forecasts to see how actual surpluses measure against forecasts. And as I suspected Treasury is very conservative and systematically forecasts surpluses much lower than reality. Taking just the last five years.
00/01 in the 2000 budget forecast was a $1.012B surplus. Ended up $2.107B
01/02 in the 2001 budget forecast was a $1.376B surplus. Ended up $2.751B
02/03 in the 2002 budget forecast was a $2.228B surplus. Ended up $5.580B
03/04 in the 2003 budget forecast was a $3.761B surplus. Ended up $6.629B
04/05 in the 2004 budget forecast was a $5.671B surplus. DEFU has it already at $6.467B and final outcome over DEFU is normally an extra $1.5B so may make $8B.
The forecasts for the next four years are $6.2B, $5.3B, $4.9B and $5.4B. Not at all small surpluses, and this takes account of all of Labour’s bribes. Now in the last four years the actual surpluses compared to budget have been at 208%. 200%, 244% and 176% so one could well have surpluses into the region of $8B to $10B.
Of course until Dr Cullen announces otherwise, we will still have these Chicken Little warnings of doom if we should actually give taxpayers any of their own money back.No tag for this post.