Yeah as Alan Kohler points out treasury and the treasurer got their guesses wrong by a wider margin than usual during the pandemic response.
Must have helped when framing this lot of guesses about the future outcomes.
https://thenewdaily.com.au/finance/finance-news/2022/03/30/budget-treasury-pandemic-wrong-alan-kohler/Snippets:
In the depths of the 2020 panic, forecasts about what this one might do to the economy and government income and expenses were a complete guess.
But let it be recorded, and not forgotten, that Treasury, and therefore the Treasurer, guessed wrong, with the result that they over-compensated and under-forecast – by a lot.
Specifically, the $350 billion in government spending, and $350 billion in entirely coincidental Reserve Bank buying of government debt, was more than double what was required, so $250 billion of it was saved by grateful, bemused households.
Treasury said GDP would shrink by 1.5 per cent in 2020-21.In fact it grew by 1.5 per cent in that year, a 3 per cent turnaround.
In October 2020 the forecast for unemployment in 2020-21 was 7.5 per cent; it turned out to be 5.1 per cent.
So in the October 2020 budget, the estimate of the deficit for that financial year (2020-21) was $213.7 billion, but it turned out to be $134.2 billion.
The current financial year has a month to go, but the deficit is projected to be $79.8 billion versus the $112 billion that was forecast in 2020.
So across the two years of the pandemic, Treasury’s early estimates of budget deficits were out by a total of $111.7 billion, or 30 per cent.
So across the three budget statements over the past 12 months – that is, last year’s budget in May, the mid-year economic and fiscal outlook in December and last night’s 2022-23 budget – the “parameter variations” (that is, things resulting from better-than-expected economic outcomes) totalled $283.5 billion over the four-year forward estimates.
