Intergenerational reports – released every five years to offer a glimpse into the long-run health of the economy and budget – are very strange beasts. Predicting anything 40 years out is a challenge. But predicting what will happen to something as unpredictable as our economy, and the budget settings it generates, requires the most adept of crystal balls.

Contrary to most media reporting, the only reasonable way to view an intergenerational report is as a hypothetical “what if” modelling exercise. And as with any such exercise, the predictions are completely meaningless without understanding the assumptions upon which they are based.