Treasury stuffs up, so why trust it now?

The only thing that can be said with absolute certainty about the federal budget is that every figure in it will be wrong. So why should we trust the numbers?

Federal Treasurer Josh Frydenberg. Picture: Sam Mooy/Getty Images

The one thing – the only thing – that can be said with absolute certainty about the budget is that every figure in it will be wrong.

Sorry, correction, every figure except the dates and of course the page numbers.

I don’t just mean, the big numbers – like that $161bn figure that’s now being sold as such a magnificently ‘small’ deficit for the fiscal year that’s just about to end.

But every single figure, down to the smallest number for the most insignificant item.

By the bye, that $161bn – just one year’s deficit - means another $6000 that every single one of you now indirectly owes via Canberra and will have to pay the interest on from here to eternity, and indeed beyond.

The actual debt’s never going to be paid off. To do that, as Peter Costello showed us, you have to run budget surpluses.

I’ll repeat what I’ve been saying since March last year: we are never, ever, going to see another surplus.

So you can add that $6000, and similar figures coming up for 2021-22, 2022-23, and on ad infinitum, to all the other money you owe either personally or already indirectly via Canberra (about $20,000 per person before Tuesday night).

Oh yes, you then need to add on your share of your state’s debt as well – we will see those numbers being revealed over the next few weeks.

The forecasts for the economy will all be wrong.

Federal Treasurer Josh Frydenberg. Picture: Sam Mooy/Getty Images

The forecasts for revenues will all be wrong. For spending, wrong.

And most particularly, the figures for the deficits and the now ever-expanding debt will all be wrong - starting with that $161bn deficit for the year in which 45 weeks have already passed.

The errors will run all the way out to fantasy deficit ‘projected’ for 2031-32 by a Treasury which has long since disappeared up its computer model’s virtual reality fundamental.

I do though have to add that I was surprised and extremely disappointed that Treasury head Steven Kennedy didn’t get his whiz-bang super-dooper treasury computer to spit out the temperatures for every capital city for budget night 2031.

After all, the same Treasury had been happy to tell us what the temperature of the planet would be in 2050.

And for that matter, why didn’t Kennedy program the said computer to give us the – with apologies to John Marsden – “the day the war began”, with China of course.

And what will happen to the iron ore price on that day.

Indeed, let’s look at what Treasury IS predicting for the iron ore price.

Why, it’s what they are always predicting: $US55 ($70) a tonne.

In the virtual reality ivory tower cacoon in which treasury, its computer and its precious computer model are cossetted, the iron ore price is always $US55 a tonne.

And if it’s not – like it’s not, right now, when instead it’s$US215 – by jeez, it’s coming back to $US55.

Cross their collective hearts and promise.

Can the slightest sense of self-awareness penetrate that Canberra bubble?

Here we have a treasury still resolutely predicting the iron ore price will fall to $US55 when just last December it said it would be at that $US55 right now.

Here we have a treasury and a treasurer celebrating the deficit ‘will’ be $161bn instead of the $198bn predicted just last December – without the slightest sense of why should anyone believe that suddenly this number is more credible than that December one?

Nothing major has happened since December. The December number is now so embarrassingly wrong because Treasury back then didn’t have a clue what was happening in the economy – captured by, but not limited to, the way it missed the iron ore price by just the teeniest $US160 or so.

And we are supposed to believe that it does now?

Originally published as Treasury stuffs up, so why trust it now?