From the AFR this morning comes an interview with the Treasurer:
Wayne Swan has warned it may not be clear until early next year whether the two “misfiring’’ engines of global growth – Europe and the US – are back on track as Labor attempts to deliver its promised budget surplus.
…Asked whether uncertainty about the global outlook had hamstrung Treasury’s ability to make accurate forecasts in the Mid-Year Economic and Fiscal Outlook, which is due for release by the end of the year, Mr Swan said: “Most of the information we need about where we are globally is there now.”
The remark supports speculation the government may deliver the MYEFO within weeks. The statement will be designed to shore up Labor’s economic credentials ahead of next year’s election.
…the Chinese will do what they have to do to keep their economy chugging along in that range that they themselves have outlined, which is in the high 7’s.”
He reiterated the need to return the budget to surplus and that there had been a “significant hit” to the budget from the drop in commodity prices.
So, an early MYEFO. Why would that be I wonder? Surely it is because the longer the Government waits, the greater the impact on its Budget will be from falling commodity prices. So it gets in early and makes a few cuts then pretends we’ll get to surplus for a few more months.
I’m wondering as well how this plays out in the longer term. With a decent MYEFO under its belt, and some momentum for Gillard on the back of interest rate cuts and the carbon tax neutralised, the Government wouldn’t, surely, consider a snap early election in the first half of next year would it?
I mean, if they wait for a year as scheduled, the mining boom is busted and is hitting growth pretty hard.
Just askin’!
