I once went to the finance director and asked what next year’s profit would be. “What number do you want?” he said.
I have to suspect that something like this happened in preparation of the figures just released by Swan.
Anyone who has worked in business knows that forecasts more than a few months out are a bit, but not much, better than guesswork. In most businesses I was involved in forecasts were not treated as fact but as something to trigger actions if reality was turning out too far from the forecast.
We also learned that forecasts of sales and costs should not change much in the short term unless there was a big event – earthquake, factory burning down or somesuch. You don’t get significant new information over a period of a few months. What you do get is swings between optimism and pessimism which is a dangerous way of running a business.
The change in the latest figures from the budget nine weeks ago seems to be the result of changes in forecasts of commodity prices over the next few years.
As my finance director would say “If the Treasurer can forecast commodities that accurately he wouldn’t be here – he would be in the South of France with his feet in a bucket of champagne.”