Friday, January 27, 2012


So, the government has announced that it may not be able to reach its fiscal target of returning to surplus by 2015. On the one hand, this isn't really surprising: the global economic crisis has got worse, and you'd expect us to be affected by it. On the other hand, Treasury was forecasting a 2015 surplus just three months ago, and dismissed any suggestion that its forecasts were too optimistic. For them to reverse themselves so suddenly suggests that they got it seriously wrong, in the process making both our major parties (who made campaign policy on the basis of those projections) into liars. The question now is whether anyone will be held to account for that. Sadly, I think the answer will be "no".

But this also raises a bigger problem. Back in the 90's, we amended the Public Finance Act to require pre-election disclosure to protect us from governments who shuffled big economic problems under the carpet and left them for their replacements to deal with. But while that may protect us from lying politicians, it doesn't protect us from Treasury - who in the past have demonstrated a definite political agenda, and may not be above stacking their projections to advance it (in particular by crying "crisis!" so as to apply the shock doctrine). Which makes it all the more important that this "error" is investigated and those responsible held to account.