Labor's surplus could be a $20 billion deficit Labor's "surpluses" will actually be deficits? You could have fooled me - not: THE nation's finances are facing a deep structural challenge that could turn Labor's promised budget surplus into a $20 billion deficit... ...two independent reports from the Parliamentary Budget Office and the federal Treasury reveal a sharp decline in the structure of the budget that will last for most of the decade... The simultaneous studies, which were released yesterday in an apparent coincidence, show that the deficit in 2016-17, when the government is promising a $6.7bn surplus, would be between $5bn and $22bn that year, were it not for the Treasury's assumption that commodity prices would only fall very gradually. Deloitte Access Economics director Chris Richardson said the average estimate of a $16bn deficit in 2016-17 was a "stunning difference" from the official forecast. Professor Judith Sloan isn't buying the Big Government vision of Treasury secretary Martin Parkinson or attempts to blame the Howard Government: As a consequence of being wealthier, the welfare bill should decline, at least relatively, and an increasing proportion of the population should purchase services privately.... Are we expected to believe that the government would not have spent those extra income tax receipts? ... David Uren warns Treasury could be very wrong again: Treasury believes the continued urbanisation of China will keep Australia's main exports in short supply, with only modest declines in coming years. Parkinson estimates there will be a 20 per cent fall in Australia's export prices across the next 15 years, but they still will be about 50 per cent above their long-term averages... Niki Savva blames the rose-coloured glasses of a Treasurer who believed his own bull: It is a myth that Treasury offered Peter Costello a range of forecasts during budget preparations and that he chose the most conservative... That does not mean he and his office have not influenced a massaging upwards of the final numbers presented to him... Treasury officials discuss the landscape with Swan, who has returned from yet another International Monetary Fund or G20 finance ministers" meeting with a rosier outlook of the world and Australia's place in it. Treasury puts its more sombre view, gets a "come on guys, get real" response from the minister and - voila - the revenues end up higher and the deficit smaller. Terry MCrann warns the Bureau of Resources and Energy Economics predicts mining investment is about to go over a cliff: ... in the past year, the [mining] boom had switched to money pouring into Australia to fund the construction of new projects that would generate the growth in future export earnings. When those projects came into production, the increased volumes of exports were expected - hoped - to make up for lower prices... But what we face is ... an investment cliff... As BREE noted, in the past 12 months, about $150 billion of projects had either been delayed, cancelled or had "re-assessed development plans."