The Turnbull Budget is under assault. Yesterday we had Treasury’s Nigel Ray on growth potential:
There was criticism of the Budget that the projections for real GDP growth over the medium term were too high.
Some have suggested these projections were raised in order to improve the Budget position. Can I say at the outset that this claim is simply not true. In fact, when Treasury introduced the current methodology in the 2014-15 Budget, we published analysis in a separate Working Paper showing that the impact of these changes on the underlying cash balance was very small – an increase of just one-tenth of a per cent of GDP by the end of the medium term.
