ELEANOR HALL: Nicki Hutley is chief economist and director at consulting firm Urbis. She has 25 years of economic, financial market and public policy experience, and she was in the budget lockup last night with the rest of us.
She’s with me now in the Canberra studio.
Nicki, first your assessment of this budget, has it changed since you emerged from the lockup last night?
NICKI HUTLEY: No, I’m still going with the title Groundhog Day budget. Look nothing has changed either in my interpretation or in fact in the policy sphere.
There is very little here to get excited about. As we were just discussing, I try to get optimistic, I’m looking for the good in these things, but really there is very little here to get excited about today unfortunately.
ELEANOR HALL: Well the projections for reducing the structural deficit are being pretty widely described as heroic. Do you agree with that?
NICKI HUTLEY: Absolutely. Look, the economic projections are ridiculously optimistic. I think we live in an uncertain world and you have to build on conservative forecasts.
I mean look, there are margins of error here, but I would be going at a much more conservative way. We’ve just got into this habit, and if you look at the chart of where our forecasts are versus where the outcomes are, we basically have entrenched this practise of optimistic economic forecasts to get us closer to surplus in four years time.
And that’s just not good enough, we actually have to have meaningful policy adjustments and as Australians we have to learn what is it we want from policy and then how are we going to pay for it?
Because we can’t have increased expenditure and reduced taxes. Those two things just don’t add up, so what do we want as a nation?
Do we want to invest in education, in social services, in infrastructure – all the good things that we really should be going for, and if so, how are we going to pay for them – because you know somebody has to.