Today’s independent Pre-Election Economic and Fiscal Outlook 2019 confirms the integrity of the Budget delivered on 2 April 2019 and verifies that the Budget is back in the black.
The 2019 PEFO confirms the $7.1 billion surplus for this coming year, with surpluses building to a total of $45 billion over the next four years and increasing to 1 per cent as a share of GDP over the medium term.
In the 2019 PEFO the Secretaries of Treasury and Finance have certified that the assumptions and economic forecasts underpinning our 2019-20 Budget are credible and conservative.
In particular, the 2019 PEFO verifies the integrity of our medium term projections in the 2019-20 Budget and confirm that they reflect the impact of decisions that have already been taken and already been publicly announced.
It shows that the Government can boost funding for all the essential services Australians rely on, including for hospitals and schools, and deliver income tax relief to hard working Australians while delivering surpluses for the entire decade to 2029-30 and paying off Labor’s debt.
The 2019 PEFO also confirms that our Liberal National Government uses prudent, cautious and realistic forecasting assumptions as the basis for our Budgets, including for commodity prices.
This stands in clear contrast with Labor who had to admit to a $33 billion deterioration in their budget bottom line between their last Budget in May 2013 and the 2013 Economic Statement delivered by then Treasurer Chris Bowen. In just eleven weeks Labor presided over a staggering $3 billion a week deterioration in their Budget bottom line on the back of their last Budget in Government.
The 2019 PEFO also completely destroys any claims about supposed hidden spending cuts in our Budget. Labor’s ridiculous claims have been exposed as just another Labor lie.
There are no assumed undisclosed future spending cuts in the Government’s medium term projections. In contrast, when Labor was last in Government, they did precisely what they are now falsely trying to accuse our Government of.
Indeed, the 2013 PEFO exposed that Labor had baked secret undisclosed, in fact then undecided, future spending cuts into their medium term projections in their 2013-14 Budget.
The 2013 PEFO reported that real payments growth was expected to average 3.5 per cent per year over the medium term. Labor ignored that fiscal reality in front of them. Instead of doing the hard yards on savings decisions, their spending projections were artificially based on an imposed forecasting assumption that real spending growth would be kept below 2 per cent on average per year until the Budget was in surplus of 1 per cent as a share of GDP.
Neither Labor’s track record of actual real spending growth of 4 per cent on average per year during their time in office, nor their own underlying spending growth projections of 3.5 per cent beyond the then forward estimates supported that forecasting assumption of 2 per cent.
Imposing that 2 per cent cap on real expenditure growth on their medium term expenditure projections irrespective of what was actually expected to happen at the time, effectively locked in $175 billion of secret undisclosed, in fact then undecided, future spending cuts over that period (refer to pages 60 – 62 of 2013 PEFO).
Australians cannot trust Labor.
Labor does not know how to manage money and when they run out of money come after yours.
And they are not telling Australians the truth about the impact of their $387 billion in higher taxes on the economy, on jobs and on hard working Australians.
2019 PEFO shows the progress that has been made in turning around the situation we inherited. This is not the time to go back to Labor’s discredited ways of the past, which when they were last in Government delivered a weakening economy, rising unemployment and a rapidly deteriorating Budget position.
