Thursday, August 12, 2010
THE Coalition has used up almost all its budget savings for new spending and tax cuts, leaving it with a bit over $1 billion of net savings over the next four years on its own costings.
Analysis by The Age finds that, on its own costings and excluding all its proposals for new transport projects, the bottom line is the Coalition would improve the budget balance over the next four years by just $1265 million.
On the Coalition's own costings, the net impact of its plans would be to reduce spending by just $796 million, and raise taxes by $469 million.
On official figures, budget spending over the four years is estimated to be $1430 billion. If the Coalition's costings are right, it would cut spending over that time by less than 0.1 per cent.
If so, what was all the fuss over deficits and debt really about? Given the margin for error, the Coalition is planning to spend just as much as Labor is. If Labor has been "spending like a drunken sailor", the Coalition plans to join the party.
In fiscal terms, the two parties will go to the election with identical policies. The spending will be in slightly different areas, but in its impact on the economy, nothing would change.
This is probably true even if, as many suspect, the real reason the Coalition is now threatening to refuse to send its policies for costing is that it knows that some were too optimistic big time.
Its plan to extend the education tax rebate is so sweeping that its costing of $760 million over four years is simply unbelievable.
On another costing, Treasury has reportedly told Treasurer Wayne Swan that the interest savings the Coalition claims from scrapping the national broadband network are overstated by $840 million.
The Coalition is now doing a dummy spit and threatening to boycott the costings process because Labor leaked that to the media. Well, guys, if you want us to elect you to be our government, you need to be made of tougher stuff.
The reality is, the Coalition has come up with excuse after excuse to delay submitting its proposals to the Department of Finance and Treasury for costing before tonight's deadline.
In 2007, Labor did the same. It submitted just 32 proposals for costing before the deadline, and put in most of its plans after the deadline, making it impossible for them to be costed.
The Coalition has followed a similar path. It lifted its tally on Monday by submitting almost $20 billion of policies for costing: essentially, its pledge to scrap the mining tax, and all the things Labor proposes to spend that money on.
But so far it has submitted just 11 small spending proposals to be costed. It estimates they would cost $388 million, out of more than $23 billion of new spending proposals. That's 1.5 per cent.
Among the policies withheld from costing are:
Replacing Labor's bare-bones paid parental leave scheme with its own more generous one. The Coalition estimates its gross cost of its scheme as $8.8 billion, which it says would be more than offset by $6.1 billion from its 1.5 per cent levy on business profits, and by $3 billion of savings on the baby bonus and other welfare benefits.
More than $5 billion of new health spending, and a similar amount of savings.
Its plan to freeze public service recruitment, announced in May (estimated saving: $3.8 billion).
The interest saving from scrapping the national broadband network ($2.4 billion).
Its plan to extend the education tax rebate ($760 million).
The Coalition created the charter of budget honesty. Now that it is in opposition, it should not use a flimsy excuse to dodge it.
The same is true for Labor, which has submitted most but not all of its spending and saving plans. Put them all on the table.