As Chris Bowen proudly released Labor’s costings today, the RBA was busy blowing it out of the water.
As reported by the ABC:
“Australia’s annual economic growth rate in 2018 was 2.3 per cent, well below the RBA’s last forecast (in February, a few weeks before the data came out) that it would be 2.75 per cent.
In response, the bank has hacked its forecast for growth over the year to June from 2.5 to 1.7 per cent — its forecast was as high as 3.25 per cent as recently as November.”
Despite all the evidence of an economic downturn, Mr Bowen has chosen to use the real GDP growth forecasts from PEFO which were the same as the April budget:
2018-19 2.25%
2019-20 2.75%
2020-21 2.75%
2021-22 3%
2022-23 3%
Every single budget keeps predicting growth of 3% (or even 3.5%) coming soon. The last time we achieved that was in 2012 when the growth was 3.9%.
He has also used the wage growth figures from PEFO.
2018-19 2.5%
2019-20 2.75%
2020-21 3.25%
2021-22 3.5%
2022-23 3.5%
According to the ABS, the private sector wage growth of 2.3% through the year to the December quarter 2018 was the highest through the year growth since December 2014. But annual rises of 3.5% are expected soon?????
Why do treasurers, or those aspiring to become treasurer, keep doing this? Or perhaps more to the point, why do the treasury and finance secretaries keep doing this?
I am sure Mr Bowen’s figures all add up, but predicating them on unrealistic assumptions whilst locking in promises of really really big, much bigger than yours, surpluses is a recipe for failure.
Labor has a far better policy agenda and an actual vision for where they want to take the country. Why spoil it by playing surplus wars?
Will they ever learn?
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