The government has announced it will spend another $3.6 billion to subsidise childcare wage increases - an amount not included in the budget just five weeks earlier.

Subscribe now for unlimited access.

Login or signup to continue reading

This raises questions about the justification for the spending, and more basically about the reliability of budget numbers.

This decision on its own will materially increase the reported deficits of $62.5 billion in the next two years.

It often appears that the annual budget has become merely one snapshot - albeit the major one - of a continuous stream of fiscal decisions.

The next snapshot will be the mid-year budget review in December, after which no doubt there will be more spending decisions before the May 2027 budget.

The term budget has lost its real meaning.

It was no doubt convenient to postpone this announcement so as not to spoil the budget theme of expenditure savings. Budget honesty was supposed to put an end to such manipulation.

But the biggest reliability issue concerns the government's favoured budget indicator, the underlying cash balance (UCB).

Six years ago, a Parliamentary Budget Office report concluded, among other things, that "the underlying cash balance (UCB) should not be relied upon as the sole indicator of the fiscal position".

But nothing has changed since then. Official budget and media reporting still emphasises the UCB, with detours as required into its component parts: cash payments and cash receipts.

Only keen followers of the government's finances would know there are other measures of the budget bottom line; including the headline cash balance - which has been almost $50 billion further in the red than the UCB........

© Canberra Times