Forecaster out of whack with others: govt
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CANBERRA, Nov 9 AAP
November 09 2012, 1:30PM
Budget projections by an independent forecaster that see federal budget deficits for the remainder of the decade are "out of whack" with the views of leading global institutions, Assistant Treasury David Bradbury says.
Modelling by Macroeconomics also predicts a greater reliance on debt that would make it harder to fund new education, disability and dental care programs, the Australian Financial Review says.
Structural deficits, that strip out temporary factors such as the terms of trade boom, are expected to amount to $122 billion from 2013 to 2016.
The mid-year federal budget review forecast a $1.1 billion surplus in 2012/13, with improving surpluses to 2015/16.
Mr Bradbury said people can make their own judgment of the economic outlook but suggestions that Australia will need to embrace some sort of financial austerity package are wrong.
"This is completely out of whack, not just with the government's forecasts but with the expectations of some of the premier forecasting institutions around the world," Mr Bradbury told ABC radio on Friday.
He said the International Monetary Fund expects Australia will be the "standout performer" this year and next, while the world's three major credit rating agencies - Standard & Poor's, Moody's Investor Service and Fitch ratings - all rate the economy triple A.
"So people can make their own assessments about where they think the domestic economy is going, but I think there is a very strong chorus of support for the underlying strength of the Australian economy moving forward," he said.
He said the government had sought to put the budget back on a more sustainable footing.
"We have made consistent efforts to chip away at various entitlements that were put into the system at a time when the Howard government was in office, at a time when the rivers of gold were flowing in and the international economy was gang-busters," he said.
But shadow finance minister Andrew Robb said Macroeconomics had "belled the cat" on the budget's poor state of structural health.
He said Treasury's own analysis in 2010 confirmed the budget would be in structural deficit until at least 2020 and this was before the government made $120 billion in unfunded future commitments.
"In light of this latest work, the government should reveal its own most up to date analysis of the structural state of the budget," Mr Robb told AAP.