COMMENT

Treasurer Joe Hockey in his Parliament House office in Canberra

Treasurer Joe Hockey could be claiming credit for the turnaround in business confidence. Photo: Andrew Meares

It's getting harder and harder for the Treasurer and Minister for Gloom, Joe Hockey, to keep faking it. No matter how much he scowls, the evidence keeps mounting that his MYEFO (mid-year economic and fiscal outlook) forecasts were a crock.

The latest exhibits for the defence of the Australian economy are today's building approvals and balance of payments numbers. Our net goods and services surplus soared 30 per cent to $10.75 billion in the December quarter. Dwelling unit approvals in January rose by 1.3 per cent in trend terms and 6.8 per cent seasonally adjusted over the previous month to be ahead a whopping 28 and 35 per cent respectively over the year.

And these are just the latest numbers showing that the mid-year economic and fiscal outlook was overly pessimistic. The reporting season showed earnings up nicely, government revenue is growing more than expected and tomorrow's national accounts should show a good rise in labour productivity that is likely to be up by more again next quarter.

So where's the "budget crisis" Hockey was sprouting last May, or the more general "budget emergency" that has become a government catch cry? It doesn't exist as advertised.

The immediate dark cloud for our economy is the flat labour market – employment flat for the past year – but that is a lagging indicator. Various surveys show there are stirrings in the vital business confidence area, which is what's needed to get businesses hiring more people. Capex last week wasn't good, but the downturn in resources is balanced by the increased production and the broad "other selected industries" category is holding its own.

It's unfortunate then that the Treasurer makes no effort to talk up the economy's prospects, that each bout of good news is met with silence from Hockey. It adds to the suspicion that he is giving his political narrative for the budget preparation precedence over the welfare of the economy.

That's a very strange thing. The way is open to Hockey to claim the economy's improvement – particularly business confidence – is the work of the coalition being elected and that the government must get on with delivering what is expected of it.

Instead, there's nothing. We're told we'll need to suffer in the coming financial year. It's implied that the government will do less from a fiscal perspective to handle the economy's transition.

Maybe Joe Hockey is grateful for the Qantas distraction, even with the apparent knockback of his loan plans – it's a distraction from the real game

Michael Pascoe is a BusinessDay contributing editor.