EYE-BALL’s Guru on – The Wayne Swan 2013-14 Federal Budget – Special EYE-BALL Guru Report – The Economic Triggers Part 2.2 –
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– 18th May – The Wayne Swan 2013-14 Federal Budget – A Special EYE-BALL Guru Report – Part I –
– 13th May – Wayne Swan’s “Treasury Mistakes” – The Evidence of Incompetence – a Ponzi expert in the making.
– 10th May – Wayne Swan’s “Treasury Mistakes” – A Follow-Up –
– 29th Apr – Wayne Swan’s “Treasury Mistakes” – Heads must roll – Swan and Bradbury must accept responsibility’ –
– 23rd Apr – Wayne Swan’s – “Investment pipeline” – disappearing before his eyes – where does he go for his next ‘bunny excuse’ –
– 21st Apr – Wayne Swan’s legitimacy – He Says … ‘high A$ causes $7.5b hole since Oct ’12’ – He’s a unique type of idiot –
– 14th Apr – The Debt Clock ticks … Tic Toc … – Gillard just spent another $3,000 – counting the real cost of this ALP Disaster –
– 5th Apr – Superannuation 2013-14 – the Government’s new Slush Fund – Proposed Changes show SWAN and SHORTEN’s stupidity –
– 3rd Apr – Government not happy about its tax collect – Claims Tax Minimisation deserves ‘Naming and Shaming’ –
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– The Wayne Swan 2013-14 Federal Budget –
– A Special EYE-BALL Guru Report –
– The Economic Triggers Part 2.2 –
| Author: EYE-BALL Guru | 27th May 2013 |
|Links to previous posts in this series about – “The Wayne Swan 2013-14 Federal Budget”:
Chapter links in this Posts:
Wayne Swan’s Headlines:
The Wayne Swan’s history can be told in each of his six previous Budgets. On each of these nights he stood before the Nation and gave us his forecasts for the Nation over the next 12 months, and across the forward estimates.
Below, those forecasts and outcomes are challenged and reviewed in the light of accountability, and why the numbers just never stacked up given the state of the economy.
Firstly – Links to Mr Swan’s Budget speeches:
To re-read these speeches is like being involved in a ‘Groundhog Day’ experience … Swan wrote these speeches without understanding the consequences of his responsibilities as Treasurer of the Nation.
In all the forecast’s researched in this project – there is no evidence recall of him even getting the big calls right … perhaps a CPI target here and there, but revenues, expenses, GDP, and the like were all grossly over or under estimated.
Treasury modelling have never got it so wrong so often on the big number calls.
Swan’s Promised Surpluses:
How many and how often did Mr Swan promise to deliver budget surpluses?
There were four  in the 2012-13 budget for the 2012-13, 2013-14, 2014-15 and 2015-16 budgets.
Gillard and Swan made the 2012-12 surplus an iron clad promise every year since 2010. In the six years of Swan budgets … the sum total is an error factor of $290 billion between forecasts and the reality to the 2011-12 year. The 2012-13 result will add another $30 odd billion to that number.
These forecasts along with many other economic indicators are exposed in this post. [See Economic Indicators Index.]
Swan’s “Jobs…Jobs…Jobs…” creation: [click on Table at right to enlarge.]
It’s all a myth – of the 960,000 in new jobs Swan brags about – 60% are part-time. Another statistic shows average monthly hours worked has fallen from 145.3 to 140.4 since Feb 2008. [see table above for evidence.]
This translates to less work and less take home pay, and as the economy slows in a post mining boom economy, the workforce will be hit hard through job losses and more reduced hours.
The saying that – ‘for every action there is an equal and opposite reaction’ – rings true in finance and economic forecasting. Swan’s predictions on jobs and unemployment, and all the other economic triggers have dire consequences if his numbers don’t measure up.
Swan’s gong – “Treasurer of the Year”:
The title of the article was – “Swan confounds his domestic sceptics”, and was published Sept 2011.
This article read again with two more years of failed Swan promises makes one ponder how he was ever chosen as ‘Treasurer of the Year’. The award is voted on by Swans peers, other G20 delegates … and given how they have all managed to stuff the world up since the GFC … we have reason to spit in the eye of all who voted for Swan.
To see all previous winners of the award – use this link. Euromoney publish these comments to advise how they make their decisions.
Swan’s Song – “Dunce Treasurer of a Generation”:
Mr Swan has my rating of his performances and it has been so for a number of years.
Anyone, and more importantly, any Political who cannot admit to failure or mistakes and do so without blaming others when the responsibility rests as in this case with the Treasurer, it measures the man in so many ways. The bar for Politicians has to be higher in accountability measures. If you stuff up you need to come clean.
This ‘little-boy’ in a giant tin hat is what ‘Bernie Madoff’ is to Ponzi schemes … what ‘George Bush Jnr’ is to America’s ‘horror’ history … Mr Swan brings new mediocrity to the role as Treasurer and his Caucus colleagues can’t see when it stare’s them in the face year after year.
Mr Swan is someone who overreached by a long way when promoted to Treasurer. He was smart enough to realise the overreach and has spent his whole time faking it, and just never admitting to his cock-up’s.
The Politicisation of Budget Forecasts:
The 2013-14 Swan Budget speech was ever so different to his previous Budget speeches.
Included in the May 2012 budget speech, Mr Swan forecast four budget surpluses for the oncoming four years. Read his May 2012 speech here.
In the May 2013 budget speech Mr Swan should have shown some willingness to eat some crow.
Everybody was waiting to hear what Mr Swan would say about the 2012-13 $20 billion turnaround, and what the ‘new’ forecasts were for the next three promised surpluses and beyond.
Mr Swan did not admit he made mistakes, or that he got it wrong. Nor did he did not show humility at the continuing errors arising from all his previous budget predictions.
In delivering his most recent Budget speech he never really addressed the issue of accountability.
The most recent Budget speech and responses are linked below:
In fact – in his 2013 speech Mr Swan went on the attack over the failings of the economy to not match his forecasts. He actually blamed ‘Real’ versed ‘Nominal’ GDP forecasts for the actual revenues not matching the budget forecasts.
This is why modern politics is no longer about truth or honesty. To get it so wrong so often over the whole of the Swan tenure as Treasurer demands fresh accountability.
Humility still is a politician’s greatest asset and yet – none, I say again – none of our modern Leaders across all levels of politics will admit to error or show that humility when they have made mistakes.
Swan pushed the blame to the Treasury modelling – and that is such an easy choice – none of them can defend themselves on any public stage … unless of course someone turns whistle-blower.
There is ‘fraud’ in this budget, and it is not a stretch to say the same about Swan’s past budgets as well.
Late last week – Treasury Head Dr Martin Parkinson PSM came out and fronted the media after the media gave Swan’s Budget a serve.
Dr Parkinson’s full statement is linked here in PDF format.
In part it said:
There is much in the speech that is challengeable – rather then get caught up in the defensive posture offered up by Treasury this point is noted. The 1.6% and 1.9% errors talked about in the extracts above equate to a 1.6% of the actual GDP growth – that is a 1.6% error on a 3% average number. That in real terms is like more than a 50% error on original estimates.
The same for the 1.9% [absolute % error] on Terms of Trade is also similarly presented to disguise the real $dollar value of the error.
Treasury have got it wrong for a long time – underestimating every one of Costello’s surplus budgets, and overestimating Wayne Swan’s revenue and expenditure budget forecasts. That is 17 years of bad estimates.
The errors in the Swan Budget’s amount to $290 billion when forecast surpluses/deficits measure up against actual results. This is to the end of 2012. All of which is now pretty much new debt created. [See previous Table 3 for more information.]
Surely if this was accountable politics, errors like this need to be accounted for. Why is Mr Swan still serving as Treasurer?
There is only one answer – to dump him pressures Julia Gillard’s position. If Gillard dumped Swan her Leadership would fail. So it comes to the case where mediocrity is rewarded, and Australia pays the price for incompetence.
The Research – Budget Data Extraction Tables:
The economic forecasts in Table 1 below are extracted for Budget papers for forecasts and actuals. The Treasury modelling errors are confirmed when they are matched up for past years.
CPI – is in line with RBA targeting. Un-employment through the GFC period was over-estimated which should have saved $billions in forecast expenditures.
The GDP Real and Nominal numbers are not too bad and within acceptable margins of error.
Table 1: [Budget Forecasts v Actuals for CPI, GDP Real and Nominal, Un-employment, Terms of Trade, and Current Account. Click to enlarge Table in a new window.]
Table 2: [Budget Forecasts v Actuals for Revenues, Expenditures, and Fiscal Result with GDP ratios. Click to enlarge Table in a new window.]
One only has to measure the depth and breadth of the numbers included in both Table 1 and Table 2 as presented above – and to compare the actuals v forecasts across all the six Swan Budgets to confirm an ongoing ‘fraud’ is exposed.
Mr Swan has never showed vision beyond his – ‘Jobs …Jobs … Jobs’ rants.
This Government’s socialist agenda to spend as much as needed to protect the workers from economic and market forces proves the agenda.
It is beyond comprehension in these global harsh times that so much protectionism is afforded when the Government of the day lies to the people about its budget forecasts to get the job done.
It is a case of telling the Business leaders on this Nation one thing and then setting agenda’s based on a completely different set of rules.
There is no thought process applied to how the consequences of the actions to let budgets run amok without prudent and required measures in place to halt spending when the revenues don’t measure up to forecasts.One only has to measure the depth and breadth of the numbers in this Table – actuals v forecasts across the six Swan Budgets to confirm an information ‘fraud’ has been committed.
Mr Swan has never showed vision beyond his – ‘Jobs …Jobs … Jobs’ rants.
His socialist commitment to spend as much as needed to protect workers from economic and market forces proves his agenda is beyond his comprehension of economic times. He also has no concept of a thought process to combat the reality of the numbers as they contradict his estimates.
The 2013-14 Budget was an election year Budget – yet the radical spend of past budgets was not evident as evident.
Has Swan realised that election defeat in three months means this budget has no validity?
Did he serve up this budget knowing it would come to nothing, as the new incoming Government would learn the full extent of the Government’s finances soon enough?
The future spend on the NDIS and Gonski will suck $10’s of billions from all future budgets.
How was Swan going to pay for these policies?
Yet – the Government is still hell bent on introducing the Legislation before they exit office.
How responsible is a Government that legislates policies with no plan in how to fund them, other than to find savings within the existing expenditures.
Who would trust Mr Swan to be able to do that?
With no chance of winning an election, and no understanding of how they will fund the NDIS and Gonski reforms, Swan and this Government have set about a fraud that leaves a legacy to create mayhem for any incoming administration.
No – that is hubris and demonstrates the arrogance Gillard and her team are all about.
In Table 2, the forecasts for ‘Revenues’, ‘Expenditures’, and ‘Fiscal Result’ is further examples of the Swan fraud.
The $1.5 billion surplus announced 12 months ago, and electorally locked as a surplus since 2010, is now admitted to be a $19.4 billion deficit. Who knows what level it will finally settle at – there is another three months of figures to be finalised.
Between the 2009 budget when Swan had ‘Headline’ forecasts of $180 billion over the forward estimates, to a 2010 forecasts for ‘Headline’ forecasts of $44 billion deficit. Swan used a ‘Picasso’ swipe to create $135 billion of revenues to reduce his forecast deficits.
At this stage the Carbon Tax and MRRT were still in the legislative stages. These numbers were fraudulent and deliberately so to serve political purposes. There was an election in 2010 and this was the setup budget for that election. At this stage Rudd was still PM – an dhe would have signed off on the forecasts.
There is plenty of reason to doubt the integrity and political agenda of all MP’s, but in Mr Swan’s case, it takes a particularly evil person to lie so obviously to the Australian people knowing that the consequences of that lie impacts on future generations in ways that Mr Swan will never have to be exposed to.
In other words – Cabinet Ministers are picked for political choices and reasons and not necessarily for what they might know about a particular portfolio. To that conclusion – it is not hard to lower the boom on our Leaders who struggle with their portfolio responsibilities.
Chapter 6 – A Question to Ponder
This research has prompted several thoughts and questions. One such question is:
Who measures that ability – voters, caucus, party members … or is it a question of who polls best, or who’s turn it might be, or who has the most factional support …
A response to this question in the context of Gillard and how she became PM challenges any belief in our parliamentary system – what is it that inspires anyone about Gillard and her team?
My annual viewing of the TV Political series – “The West Wing”, prompts the timing of the question.
During Series 3 episode 7 – where CJ Creeg – [Allison Jannely] does her thingy over the Republican Leaders response to the – ‘Why do you want to be the President’ question, I was perplexed to think about the question in a real setting.
Hence the thought about why someone like Gillard would want to be a Prime Minister. She has a criminal past, and is currently under police investigation – why would she tempt fate when she knows she can’t win give her past?
The question goes to any Leader … what can they bring to the table that will inspire a Nation …
In the next Chapters the ‘Economic Triggers’ are examined in more detail.
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