Peter Costello

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Labor Fails Economic Test

NO.133

LABOR FAILS ECONOMIC TEST

Kevin Rudd has failed to lodge all his policies with the independent costings umpire, breaking his commitment to fully comply with the Charter of Budget Honesty and ensuring that no Australian can have any confidence in Labor’s costings.

Mr Rudd has made much of his so-called economic conservative credentials but has failed to meet the most basic test of the Charter of Budget Honesty – meeting the deadline that would ensure the Departments of Treasury and Finance and Administration could release their assessments by the time of the election.As of last evening’s deadline set by Dr Henry and Dr Watt, the Coalition had submitted 38 policies for costing.The Labor Party had submitted 32.The Coalition has submitted for costing every policy listed on our website and released to date.Yesterday the Labor Party submitted 14 items for costing by Treasury and Finance. These 14 items comprised 2 spending measures and 12 savings measures.Overall they have submitted 16 spending and 16 savings measures.Of total gross spending worth more than $12 billion, Labor has only submitted $2.4 billion in spending commitments before last night’s deadline.Significant ALP policies which have not been submitted include:

  • Labor’s Digital Education Revolution
  • Labor’s $2.5 billion public hospital policy (including GP super-clinics)
  • Labor’s rental subsidy scheme (centred on $6,000 tax breaks for investors)
  • Cutting withholding tax
  • Labor’s $1 billion tax credit for water infrastructure
  • Teen dental vouchers
  • $150 million for insulating rental properties
  • Reduced HECS for maths and science students.

Nearly $10 billion of Labor’s spending has not been submitted and the public can have no confidence in it. Of the savings submitted, very few relate to the much vaunted claim of $3 billion of savings.Of the $3 billion list of savings claimed by Labor in March, comprising 32 items, only 8 have been submitted for costing. These 8 items from the original list amount to less than ¼ –$712 million – of the so-called $3 billion.Labor has not submitted the following savings:

  • $395 million from the abolition of WorkChoices
  • $350 million from government advertising
  • $395 million from consultancies
  • $130 million from cuts to ASIC.

In March, Labor claimed it would save $480 million over 4 years from improved tax compliance. Yesterday, they increased this to $751 million. No explanation is given.The bulk of the savings submitted by Labor represent the abolition of a government measure to be replaced with a similar ALP measure:

  • Government’s green school vouchers are scrapped to make way for Labor’s ‘solar schools’
  • Government’s workskills vouchers are scrapped to make way for Labor’s ‘Skilling Australia’.
  • Government’s hospital-based nurse training is scrapped to make way for Labor’s additional nursing places at university.
  • The Government’s Industry Productivity Centres are scrapped to make way for Labor’s Enterprise Connect Centres.
  • The Government’s MBS rebates for dental are scrapped to make way for Labor’s dental scheme.

The Coalition established the charter after 1996 after Labor claimed, during the election, that the Government’s budget was in surplus. In fact it was in deficit by $10 billion.

Since driving the Budget back into balance the Coalition Government has delivered 10 budget surpluses.

The charter ensures that an independent umpire can verify and cost the major party’s policies so Australians can make up their own minds about which party has economic credibility.

Since the charter was established, no Labor Opposition has come close to putting all their policies in for independent assessment and now Mr Rudd has joined that dubious list.

MELBOURNE
16 November 2007

Contact: David Gazard

0428 405 107

16 Nov 2007

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