Tuesday, August 21, 2007

Newsflash: They are rolling in it.

From the Treasurer and Finance Minister:

Preliminary estimates indicate that the Australian Government general government sector recorded an underlying cash surplus of $17.3 billion for 2006-07, which is $3.7 billion higher than expected at the time of the 2007-08 Budget.

The Government will use the realised surplus from 2006-07 to transfer $7 billion to the Future Fund immediately. This should allow the Fund to meet its objectives without any additional Government contributions provided all earnings are re-invested.

The Government announced in the 2007-08 Budget that it would transfer $5 billion into the Higher Education Endowment Fund (HEEF). In view of the better than expected outcome, the Government will now invest an additional $1 billion capital in the HEEF...

...there is $2.5 billion remaining for investment. This will be invested in the Health and Medical Investment Fund (HAMIF) by the end of the financial year after legislation is passed establishing the Fund.


Appu said...


Is it a good thing that treasury gets it's numbers so consistently wrong? Who is responsible for the mistake - in this case an error of 27%. If it had gone 27% the other way who would have copped it?

John Barrdear said...

Trackback: I'm not so sure that the "mistake" is accidental or even that surprising (to the Treasury).

spog said...

It always amuses me that Treasury consistently gets this wrong, considering that it requires families to predict their income up to a year ahead for things like family tax benefit. Not exactly a good example to be setting.

EconoMan said...

Treasury are happy to consistently underestimate the revenue side of the budget. They have been doing it for years. John in the trackback points out one advantage -- managing the news and being able to 'exceed expectations' (there's a downside when it comes to the Budget: "we taxed more than you thought we would"). It also covers the downside risk John mentions

But there is another important reason they do it. It acts to curb the penchant for spending of other ministers. Just like the jam jars are designed to do...

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