Once the leader of economic policy in Australia, a politicised Treasury is now marginal to debate and has a growing track record of failure.
Treasury was once the best and the brightest of the Australian public service, the institution that drove economic reform and had helped engineer Australia’s long run of economic growth. Now it’s a politicised policy dead zone with a growing track record of failure.
The evidence isn’t merely in Treasury’s long record of predicting wages growth that never materialises (its latest 2018-19 wages forecast of 2.5% has been revised down three times since 2016, but is still ahead of the year-to-date WPI rise of 2.3%). It has been blindsided by the collapse in economic growth in the second half of 2018: in the 2018 budget it confidently predicted 3% growth this financial year, and revised that down to 2.75% in December.