It All Adds Up As Minister Announces Full $17 Billion Revenue Writedown

In all the talk from the federal government over the past fortnight about the revenue writedowns affecting the Budget bottom line in recent weeks, they’ve been talking a figure of $12 billion.

What they didn’t do was add in the writedowns previously announced in the Mid-Year Economic and Fiscal Outlook and talk about the combined writedowns this financial year.


Today, someone included that $4 billion already announced, and used the powers of addition to give us the real figure.

Finance Minister Penny Wong mentioned it on Sky News – $17 billion. (Hat-tip: rounding effects).

Oh and while she was at it she announced the government wouldn’t be going ahead with planned increases in family benefit payments which would be worth $600 to eligible families with two kids. Those payments were supposed to be funded by the awkwardly-undelivering MRRT and would have affected over a million families.

A Treasury source said this morning: “It’s the ‘new number’, but all any journalist had to do was add the two numbers together”.

Sure, any journalist. Or any member of the government seeking to lay out all the facts.

Shadow treasurer Joe Hockey said on Twitter that the budget was in “total chaos”. “Wong says revenue write downs now $17bn. Last week Gillard said $12bn. Week before Swan said $7bn,” he wrote.

Prime Minister Julia Gillard was very exact in her address to the Per Capita lunch last week when she said:

The “bottom line for the Budget bottom line” is this: the amount of tax revenue the Government has collected so far this financial year is already $7.5 billion less than was forecast last October.

Treasury now estimates that this reduction will increase to around $12 billion by the end of the financial year.

The government has handled this run of bad fiscal news deftly, you’d have to admit. The PM’s speech was telegraphed in the papers the morning she was due to deliver the bad news; then the prospect of a new levy to fund the National Disability Insurance Scheme was floated the morning they planned to announce it. It got duly announced as an increase on the Medicare levy and with Abbott’s previous commitment to supporting the NDIS the government managed to snatch a victory. With the revenue write-down, the initial figure was $7.5 billion, then $12 billion – then one more nudge today to reach the now-understandable figure of $17 billion which just weeks ago would have been horrifying.

Pity for the government that it finally seems to be managing its message this late in the day. And there’s only a week to go to keep managing down expectations into the increasing gloom that’s likely to surround the federal Budget.

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