Right Pulse

…that you can’t criticise Ken Henry’s Treasury forecasts:

THE International Monetary Fund has cautioned against further budget stimulus spending, saying the Reserve Bank should provide the front line of defence against further weakening in the economy with more interest rate cuts.

The IMF has questioned Treasury predictions about the strength of the economic recovery, echoing predictions by the Organisation for Economic Co-operation and Development that Australia’s medium-term growth will be slower than predicted in last month’s budget.

And I found this little snippet revealing as to why the budget is in deficit:

Treasury secretary Ken Henry has defended the budget outlook, saying Australia’s terms of trade (which measures the strength of export prices compared with imports) would remain 40 per cent above their average from the 1990s once the “short term” economic weakness subsides…Dr Henry said strong commodity prices would support incomes and government revenues.

Hang on, I thought balancing the budget was all down to luck and the commodity boom?