Don't bank on PEFO projections

More unrealistic is the expectation that spending will be 0.9% lower as a percentage of GDP by the end of the period. This forecasted sudden fall in spending can be compared with a nearly 2% rise in spending against GDP since Labor took office in 2007.

Much of that spending growth has come from the major policy announcements listed above (together with the stimulus). Without a concerted effort to refocus the role of government, we should expect ever-increasing spending promises aimed at feeding the 24-hour news cycle.

We've seen this over the last 10 years, with three-quarters of growth in Commonwealth spending coming from new or expanded programs. Labor boasts that it has passed 590 new laws since 2010, while the Coalition alleges the government has also passed 22,000 new regulations. After a while the costs start to add up.

PEFO also estimates unemployment in 2014/15 will rise to 6.25% and then projects a fall to 5% in 2015/16. Unemployment hasn't fallen by 1.25% a year since 1995, yet this dramatic fall is supposed to occur with employment growth of just 1.5% a year, a heroic assumption.

Other unlikely assumptions include the carbon price, which is projected to 'transition … to the longer-term modelled price of $38 in 2019–20' despite being estimated at $6.20 for next year. While the number of boat arrivals is projected to fall from 15,600 to just 4,452 in the next two years. Since 2,764 people arrived the month after the PNG solution was announced, this may prove to be a substantial underestimation.

The fallibility of these assumptions means they do not constitute solid grounds to expect an actual surplus in 2016/17 – and the less said about the 10-year projections showing surpluses of 1% of GDP the better.

We should forget the incorporeal Projections of surpluses, and instead press politicians on what they will do to avoid the certainty of current deficits.