Treasurer Koutsantonis has been left red faced by having to admit his bizarre and unrealistic revenue assumptions he included in this year’s budget papers were wrong.
When the budget was released many critics including Julie Novak from the IPA and Adjunct Professor of Economics Richard Blandy attacked Mr Koutsantonis’s revenue estimates as misleading, fraudulent and make believe.
Mr Koutsantonis’s bizarre assumptions included:
• Highest growth in tax revenue of all states
• Fastest growth in stamp duty revenue of all states
• Payroll tax revenue growth faster than QLD and VIC despite lowest employment growth of all states
At the time Mr Koutsantonis rejected the criticism and said he was confident of achieving his budget forecasts and that ‘they are all very, very conservative forecasts.”
However, in the recent MYBR Mr Koutsantonis had to admit he had overestimated stamp duty revenue by $190 million over four years and payroll tax revenue by $128 million over four years.
Those forecast errors totalled $318 million and together with budget blowouts led to Mr Koutsantonis having to raid the MAC reserves by $853 million to help fix his budget problem.
“Virtually every economic commentator in the state could see Mr Koutsantonis’s budget was based on unrealistic forecasts, but his only response was to arrogantly attack the critics,” said Shadow Treasurer Rob Lucas.
“The bizarre situation in SA is that Treasury is the only Treasury in the country that doesn’t have its own economic forecasting unit. Only Mr Koutsantonis and Mr Weatherill can explain why they have supported the move of this specialist economic forecasting unit out of Treasury and placed it in Mr Weatherill’s Department of Premier and Cabinet.
“It is time for Mr Koutsantonis and Mr Weatherill to admit they have blundered and return the specialist economic forecasting unit to Treasury.”
