Putting the budget forecast to the test

If the MYEFO falls in line with historic averages, its forecasting error will be around $10 billion. How these predictions play into reality, and the next election, will be anyone's guess.

History shows the multitude of moving parts in the estimates of government spending and revenue and the inevitable uncertainty about the performance of the economy. This simply means that there is always a difference between the MYEFO estimates for the budget bottom line and the final budget outcome that is delivered around nine months later.

Over the last 12 years, the average error in the budget balance between the MYEFO and the final budget outcome is 0.63 per cent of GDP. In 2012-13 dollar terms, that is an average error of around $10 billion.

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