The state of the budget has deteriorated since the fiscal outlook released in the election campaign, Treasurer Joe Hockey said today, promising the government would have more to say before Christmas about how it would “fix the budget”.
Although it was not a “significant” amount he would not give a figure for the slide, saying he did not want to follow Labor’s pattern of continually putting out changing numbers.
Hockey and Finance Minister Mathias Cormann were releasing the 2012-13 budget outcome, which showed an $18.8 billion deficit. The outcome of what Hockey described as Labor’s “second last budget” is mainly of historical interest because the numbers have been overtaken by the Labor government’s economic statement and by the official update released by Treasury and the Finance department under the Charter of Budget Honesty in the campaign. The $18.8 billion figure was in the economic statement.
The big deficit compared with the May 2012 budget forecast of a $1.5 billion surplus, a turn around caused by a massive falloff in revenue.
Hockey said the government was methodically going through every line of the budget, identifying which numbers were robust or not, and examining the forecasts.
“We will have a lot to say between now and Christmas about the state of the budget, about what we are going to do to fix the budget,” he said.
But no decision had been made on when to release the mid-year budget update, which gives a full picture of the state of the books.
This is normally put out before Christmas but can be as late as January. The government has been concerned that getting it out too early could hit pre-Christmas confidence, which it is trying to talk up.
Hockey said: “What Australia needs is an injection of confidence, and we have done that by having a change of government”.
He dismissed concerns about a “bubble” in the housing market. “The most important point is at this stage that there is confidence back in the real estate market in Australia … rising house prices actually help to make marginal property development viable. There is a shortage of supply out there and what this will do is make supply more readily available.”
One of the early pieces of legislation when Parliament begins, probably in early November, will be to raise the debt ceiling, at present $300 billion. Hockey said the debt level would be extremely close to this limit before Christmas.
Former treasurer and current interim Labor leader Chris Bowen said Hockey should make public the extent of the deterioration in the budget since the Treasury-Finance outlook in the campaign.
Bowen said Hockey had indicated he was quite likely to release the mid year outlook in January “when Australia’s press gallery is on holidays”.
“This is not transparency, and it’s part of a growing and clear culture of secrecy in the Abbott government.”