What six failed predictions taught Australia about its future
This article analyzes Australia's intergenerational reports, highlighting how their long-term economic and demographic predictions, initially forecasting surpluses, consistently failed due to unforeseen global events like the GFC. It emphasizes that these reports, despite their inaccuracies, offer plausible insights within a wide band of uncertainty. The piece reviews past reports from treasurers like Peter Costello and Jim Chalmers, noting their consistent warnings about future budget deficits.
Why it matters
Understanding the limitations of long-term economic forecasting is crucial for policy-making and public expectations, as it demonstrates how external shocks can rapidly alter national fiscal trajectories and budget outlooks.
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Share A A A There is one certainty about Jim Chalmers’ upcoming intergenerational report – it will be wrong.
Brimful with huge projections about how the federal budget, the economy and Australian society will look by the mid-2060s, it will outline a future markedly different to what we are experiencing today.
Peter Costello released the first intergenerational report under prime minister John Howard in 2002 with the aim of mapping out the nation’s fiscal future. Pat Scala But, like the six previous iterations of this report that was first produced by Peter Costello in 2002, its prognostications are unlikely to be correct. And that is not a problem.
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