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Labor's 'razor gang' to determine fate of budget surplus in lead-up to election Labor's 'razor gang' to determine fate of budget surplus in lead-up to election
(2 months later)
The cabinet's "razor gang" is meeting on Friday to decide whether Labor will dump its promise to return the budget to surplus in 2016-17 or sign off on another round of politically unpopular cuts just before the election.The cabinet's "razor gang" is meeting on Friday to decide whether Labor will dump its promise to return the budget to surplus in 2016-17 or sign off on another round of politically unpopular cuts just before the election.
The expenditure review committee of cabinet is finalising the details of an economic statement the government wants to launch early next week, ahead of the election campaign.The expenditure review committee of cabinet is finalising the details of an economic statement the government wants to launch early next week, ahead of the election campaign.
The federal treasurer, Chris Bowen, told reporters on Friday it remained the government's intention to return the budget to surplus over the economic cycle, and to offset all new spending with savings measures.The federal treasurer, Chris Bowen, told reporters on Friday it remained the government's intention to return the budget to surplus over the economic cycle, and to offset all new spending with savings measures.
"We will stick to our budget strategy. We will offset new expenses. We will issue an economic statement in an open, clear and transparent way," Bowen told reporters."We will stick to our budget strategy. We will offset new expenses. We will issue an economic statement in an open, clear and transparent way," Bowen told reporters.
"We are continuing with our strategy to return the budget to surplus over the economic cycle. That's our intention: to return to surplus in 2016-17.""We are continuing with our strategy to return the budget to surplus over the economic cycle. That's our intention: to return to surplus in 2016-17."
Existing budget forecasts from May are for an $800m surplus in 2015-16 – which technically puts the budget in balance; and a $6.6bn surplus in 2016-17.Existing budget forecasts from May are for an $800m surplus in 2015-16 – which technically puts the budget in balance; and a $6.6bn surplus in 2016-17.
The statement is expected to reveal a decline in the terms of trade and continuing weak revenue collections. The government must also account for the budgetary impact of recent policy shifts. Bowen has not denied the revenue shortfall could be as high as $20bn.The statement is expected to reveal a decline in the terms of trade and continuing weak revenue collections. The government must also account for the budgetary impact of recent policy shifts. Bowen has not denied the revenue shortfall could be as high as $20bn.
Finalisation of the statement comes as the opposition has declared it no longer has confidence in Treasury forecasts. On radio on Friday morning the shadow treasurer, Joe Hockey, said the Coalition would not rely "on the information that is provided solely by the government, because every time the government publishes a number it is dead-set wrong.Finalisation of the statement comes as the opposition has declared it no longer has confidence in Treasury forecasts. On radio on Friday morning the shadow treasurer, Joe Hockey, said the Coalition would not rely "on the information that is provided solely by the government, because every time the government publishes a number it is dead-set wrong.
"We are using the parliamentary budget office, we are using state government colleagues, we are using independent advisers, we have a range of different sources," Hockey said."We are using the parliamentary budget office, we are using state government colleagues, we are using independent advisers, we have a range of different sources," Hockey said.
Hockey contends the government has bullied the Treasury into releasing figures that are not credible.Hockey contends the government has bullied the Treasury into releasing figures that are not credible.
In addition to new forecasts in next week's economic statement, Treasury releases updated economic forecasts in the campaign. The pre-election economic and fiscal outlook is an independent calculation released by the secretaries of Treasury and Finance within 10 days of the issue of the writ for a general election.In addition to new forecasts in next week's economic statement, Treasury releases updated economic forecasts in the campaign. The pre-election economic and fiscal outlook is an independent calculation released by the secretaries of Treasury and Finance within 10 days of the issue of the writ for a general election.
Hockey's comments suggest the opposition has no confidence in that process, and will produce costings based on sources other than Treasury.Hockey's comments suggest the opposition has no confidence in that process, and will produce costings based on sources other than Treasury.
Labor defended the integrity of the budget process run by the economic agencies. "As part of the charter of budget honesty, the departments of Treasury and Finance must provide an independent update so the public can see the state of the budget before casting their vote," the finance minister, Penny Wong, said in a statement.Labor defended the integrity of the budget process run by the economic agencies. "As part of the charter of budget honesty, the departments of Treasury and Finance must provide an independent update so the public can see the state of the budget before casting their vote," the finance minister, Penny Wong, said in a statement.
"The government of the day has no influence or input into this update.""The government of the day has no influence or input into this update."
Bowen contended that Hockey was attempting to hide the Coalition's budget cuts ahead of the election.Bowen contended that Hockey was attempting to hide the Coalition's budget cuts ahead of the election.
The Coalition ran into criticism in 2010 when the accuracy of its costings were contested by the Treasury.The Coalition ran into criticism in 2010 when the accuracy of its costings were contested by the Treasury.
The opposition leader, Tony Abbott, campaigning in Tasmania on Friday, was cautious about when the Coalition would return to surplus. "As quickly as possible," he said.The opposition leader, Tony Abbott, campaigning in Tasmania on Friday, was cautious about when the Coalition would return to surplus. "As quickly as possible," he said.
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