I haven't had time to go through it in detail. However, three very brief comments:
- It illustrates the continuing difficulty of making reasonable budget projections in the face of so many uncertainties.
- It is contractionary, likely to reduce GDP growth by between 0.5 and 1%, thus adding to the contractionary effects of State cuts. One commentator described all this as one foot on the break (fiscal policy), one toe on the accelerator (monetary policy).
- The assumptions are interesting. One is a slight increase in the participation rate. That seems unlikely.
I am glad that I don't have to make economic forecasts on my blogs. It's much easier to focus on longer term trends!
A further sample of reporting on the MYEFO:
- Elizabeth Knight Swan extracts more cash with minimum of pain
- Peter Martin Swan empties bag of tricks to save his skinny surplus
- Phillip Coorey Slender surplus hangs in the balance