The (make believe) PREFU numbers are out: "*this* time it will be different."

The Blue Team is crowing again about a budget surplus. In three years time. They seem to have forgotten their promise three years ago was that we'd be in operating surplus by now.

It's a bit like the old Soviet Five-Year Plans, isn't it. At the Plan's announcement, in those old Soviet days, forecasts were delivered and cast-iron promises made; and then, after five years, the same failures appeared, along with excuses for the failure -- saboteurs/wreckers/bad harvests -- at which point a new Five-Year Plan was announced promising that this time it will be different.

Nicola Willis is in the "this time it will be different" phase.

Because Treasury's crystal-ball waving three years ago forecast that net debt would peak at 22.8% of GDP in 2024/25, then fall. It didn't. It was make-believe, a fantasy: what economist Michael Reddell calls "vapourware."

Because today, net core Crown debt is forecast to peak at 46.1% of GDP in 2027/28. "So the important context is that NZ is now carrying roughly twice as much net debt relative to the size of the economy as the peak Treasury forecast in the 2023 PREFU [i.e., Treasury’s Pre-election Economic and Fiscal Update]."

And Michael Reddell reminds us that 

at the 2023 election National promised that the govt would be in budget surplus (& not on a make-believe measure) and that debt would have been falling by now. (Both Labour and National numbers rested on make-believe assumptions. Likely to be true this time too).

The promises, like the forecasts, are worth nothing. Why? Because Treasury is required to report on the basis that the Ministry of Finance told them that a re-elected govt would suddenly 'get religion'" -- would suddenly become fiscally responsible; would suddenly lose the spending bug.

Yeah right. Like that's ever going to happen.

Willis is still spending more than Grant Robertson’s 2019 pre-COVID "Wellbeing Budget," and she has no plans to unwind the post-COVID government bloat.

There is no likelihood of Willis getting the responsibility religion any time soon. 

But maybe this time it will be different.