No surprises here:
Company tax slump threatens surplus plan
If company tax receipts perform as poorly in the June half year as they did in the December half, the government will face a deficit this year approaching $50 billion.
It would be beyond the reach of the creative accounting evident in last November’s budget update to turn this into a 2012-13 surplus.
Treasury secretary Martin Parkinson yesterday underlined the serious weakening in the structural budget positions of both commonwealth and state governments.
Tax has fallen as a share of GDP by four percentage points since the global financial crisis, equivalent to a shortfall of about $60bn a year.
It “is not expected to recover to its pre-crisis level for many years to come”, he said.
Nearly two weeks ago, Barnaby Is Right readers saw that the government’s management of the budget for this financial year was tracking almost identically to 2010-11, when Labor delivered a record $51.5 billion deficit:
According to the RBA, Labor has racked up a $30.26 billion loss for the first half of 2011-12:
That’s just $3 billion less than the record deficit they racked up for the first half of 2010-11:
Now, it is worth recalling that in the November MYEFO budget update, Wayne had to revise his original May budget “estimate” for a $22.6 billion deficit this year. He told us it would blow out to $37.1 billion.
Don’t you just love economic forecasting?
$22.6 billion deficit, forecast in May.
$37.1 billion, forecast in November.
$5? billion deficit actually achieved, at the end of June.
But never mind all that.
We are all going to believe the headlines, and the TV sound bites, and the rants in Question Time, when Wayne and Co. loudly proclaim that much-promised “return to surplus” in the May budget.
Even though it will be nothing more than a forecast.
With even less credibility than all four of their previous #epicFAIL budget forecasts.
There are only two chances of Labor achieving anything like a surplus in 2012-13.
Buckley’s. And none.
Wake me up on June 30, 2013, dear reader.
Then we shall see just how large a budget deficit for 2012-13 Labor actually delivers.