PEFO numbers barely change from Bowen's

The numbers in the independent Pre-election Economic and Fiscal Outlook (PEFO) have barely differed from those of the federal government.

It was always unlikely the independent assessment of the federal budget by the Treasury and Finance was going to differ hugely from the government's own numbers.

If it had, Treasurer Chris Bowen would have had a lot of explaining to do.

There was small improvement in the budget bottom line over the past week or so, but it was hardly a smoking gun and may do little to sway Australians when they go to the polls on September 7.

The department's Pre-election Economic and Fiscal Outlook (PEFO) released on Tuesday, fulfils part of the Charter of Budget Honesty agreed to by the parties.

It came just 11 days after the government's economic update statement that preceded the calling of the election by Prime Minister Kevin Rudd.

The PEFO confirmed the economy is likely to slow to 2.5 per cent this financial year, unemployment will rise to 6.25 per cent, and the government's deficits will be bigger than the May budget forecasts.

However, the small $4 billion surplus forecast for 2016/17 has now increased by $200 million to $4.2 billion, thanks to the positive impact of a lower Australian dollar on tax receipts.

A rise in the European carbon price also helped by offering more revenue to the coffers.

That's because Australia's carbon price will link to the European emissions trading system in mid-2014 if the Labor is re-elected.

It won't exist at all under a Liberal-National coalition government.

The PEFO is supposed to give all parties an honest assessment of the budget and economic outlook within 10 days of the start of election campaign and help them cost their election promises.

Yet, since the charter was introduced in 1998 by former Liberal treasurer Peter Costello, it remains a political football.

At one stage, it appeared the opposition was going to ignore the PEFO after claiming its independence had been tainted by Labor issuing its own statement on August 2.

The coalition's since conceded it's the best analysis available.

Labor says the release of the PEFO is "D-day" for the opposition.

But the coalition is likely to gradually drip-feed voters its policies and costings, while promising there'll be enough time to consider their merits.

From now, expect Labor to vigorously pursue their rivals on this point.


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Source: AAP


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