Treasury review can’t be revenue witch hunt: economists

The government is planning a review of the federal Treasury. Some economists are concerned the department might become a scapegoat for revenue shortfalls.

The Abbott government must avoid the temptation to use its upcoming review of the Treasury as a witch hunt over falling revenue, economists warn.

UBS banker John Fraser gets his feet under the desk as Treasury secretary next week. Announcing the appointment last month, Treasurer Joe Hockey tasked him with a “thorough review of the Treasury’s resources and capabilities”.

The accuracy of Treasury forecasting is likely to be a focus — there have long been concerns inaccurate modelling of government revenue over several years has exacerbated the gap between revenue and spending. But AMP Capital chief economist Shane Oliver believes the department shouldn’t shoulder the blame.

“There’s no doubt there has been an issue with budget forecasts, mostly relating to revenue,” he told The Mandarin this week.

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  • Norman Hanscombe

    Why would Abbott need a witch hunt? The major problem Labor Governments encountered arose not from Treasury inaccuracies but rather our practice of assuming absurdly optimistic income streams would continue indefinitely and then pushing expenditure even higher still.