Saturday, May 7, 2016

Charter Treasury

There's an interesting opinion piece in this morning' Australian newspaper - **the only credible paper in Australasia.  It points out some of the absurd inaccuracies of treasury forecasts in Australia.   

Treasury can’t even accurately predict revenue next year.
For 2016-17, the width of the 90 per cent confidence interval on the estimate of the budget receipts is approximately $50bn either way, which is nearly 3 per cent of GDP.
If the Treasury can’t even forecast revenue one year out with any degree of accuracy, what hope is there for 10 years’ time?

I recall the same malaise affecting NZ's treasury but I'm not quite sure what its current performance is like.  Certainly forecasting in NZ is made easier by the absence of mad socialists like Turnbull and Ruddd throwing billion of dollars down the storm water drain.

Adolf has the answer.

Remove forecasting duties from Treasury and contract them out to the private sector.  Lets have some Charter Treasuries.  If they get their forecasts wrong by a factor greater than five percent, sack them and appoint a different firm.

** For six dollars per week you can rread the whole thing.

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