I’m not sure why it comes as a surprise that Treasury made an error in their figures. After all, they’ve made an error every year for the last nine when they projected how much tax the government would collect, giving Michael Cullen an excuse not to deliver the tax cuts that were then (and still) so desperately needed.
They’ve made an error every year when they’ve “predicted” the country’s growth. Or the effects of the Reserve Bank’s economic dictation.
So frankly, the very phrase “Treasury credibility” looks increasingly like an oxymoron -- their credibility is almost on a par with that of their colleagues in BERL who they were so recently beating up.
At least this time, for once, their error has caused some belt-tightening where it’s most needed.
UPDATE: The inimitable Jamie Whyte, the NZ philosopher whose best-selling book Bad Thoughts: A Guide to Clear Thinking is around here some place, writes in the London Times on the effects of central banks’ economic dictation.
Rather than giving the Bank of England more powers as Bank of England governor Mervyn King is calling for -- just as every other central bank and central banker around the world is calling for more powers for their bailiwick -- they should instead be given less power, says Whyte, who’s clearly been boning up on the Austrian Business Cycle Theory. Just like you should by reading his column: Strip the Bank of England of its power.