Australian Economy – Too Tricky, That “Surplus”

Posted on Fri 12/23/2016 by


Bolt New 01By Andrew Bolt ~

Are you  surprised?

The Australian Federal Coalition Government’s wafer-thin projected 2020-21 surplus, the linchpin of the nation’s AAA rating, is achieved entirely by a change in accounting for the Future Fund headed by Peter Costello — the man responsible for the last budget surplus in 2007-08.

AustralianEconomyThe projected budget surplus of about $1.1 billion will be achieved only because of a reclassification of about $4bn in Future Fund earnings in that year, not because of any improvement in under­lying budget performance.

An accounting change introduced in last year’s budget means the Future Fund profit will be included in the government’s accounts for the first time in 2020-21. The budget papers count on strong growth in ­Future Fund earnings, rising from $2.8bn this year to $3.9bn by 2019-20.

Deloitte Access Economics partner Chris Richardson said it appeared that much of the predicted improvement in the budget bottom line — from a $10bn deficit in 2019-20 to the small surplus in 2020-21 — would come from the change in treatment of Future Fund earnings…

“We need to be wary of the easy fix — the money that appears thanks to changed accounting treatment rather than genuine savings.”

Andrew Bolt writes for the Herald Sun, Daily Telegraph, and The Advertiser and runs Australia’s most-read political blog. On week nights he hosts The Bolt Report on Sky News at 7pm and his Macquarie Radio show at 8pm with Steve Price.

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