Some Thoughts on Coalition Costings

A recent trip to Perth prompted some thoughts on Coalition costings, starting with what's happened in Western Australia.
Of Cuts and Cons

The Barnett Liberals were elected promising to deliver a $4.8 billion swag of ambitious infrastructure projects: the Metro Area Express Light Rail, the Perth Airport line and the Perth to Darwin highway. But their promises are a sham.

Scrutinise the costing details and you find the most brazen of creative accounting cons: the projects rely on an ‘assumption’ that the Commonwealth would fork out $3 billion.

Where did they get this number? Certainly not from the Commonwealth. They just made it up. You can promise whatever you like when there’s imaginary money to pay for it.

This was just one of the Liberals’ tricks uncovered by WA Treasury, who red-flagged the contribution assumption as a ‘substantial risk’ to the Liberals’ budget integrity.

Let’s be clear. The issue is not the merit of the programs. The issue is Mr Barnett blatantly misleading the community about what he can deliver.

Perhaps Mr Barnett might claim that his costings were premised on swinging a mate’s rates deal if Mr Abbott is elected on 14 September. Not likely. Tony Abbott has admitted that the Liberals ‘have no history of funding urban rail and I think it’s important that we stick to our knitting’. (Conversely, Federal Labor have put more into urban public transport than every previous government since Federation – combined.)

Unlike the Federal Liberals, Labor will not automatically veto rail investment. We will assess the Barnett proposals on their merits, in the established process. The process involves picking up the phone to the Commonwealth and setting out details of the projects so that a formal assessment can take place.

Depending on the outcome of the funding bid - $1.6 billion of which Mr Barnett hadn’t even submitted prior to winning the election – Western Australians could be left with a $3 billion Barnett black hole.

Now that’s a lot, but it’s loose change compared to the $70 billion fiscal crater engulfing Mr Barnett’s Federal Coalition colleagues.

Seventy billion is not a Labor figure. It’s what Joe Hockey admitted to Sunrise on 12 August 2011.

Mr Abbott has racked up this $70 billion blowout by saying ‘yes’ to every vested interest while yelling ‘no’ to Labor’s responsible savings.

What Mr Abbott hasn’t done is outline exactly how he plans to plug his $70 billion black hole. Mr Abbott has only revealed a handful of his cut-back plans – and they’re not pretty.

Speaking on 3AW on 3 February 2010, prior to the last election, Mr Abbott told listeners that he’d go to the election ‘with a list of promises, a list of commitments and we will fund them without new or increased taxes’.

But Mr Abbott’s business tax hike will affect 3,200 successful Australian businesses, which will be passed onto Australian families through higher prices.

And don’t take my word for it. In a recent interview with Mr Abbott on Adelaide’s 5AA radio, the host asked ‘The Fin Review today reports that the nation’s largest companies are unhappy with what it will cost them – they think it might cost about $100 million on average for these big companies. They would in turn, turn that around into a tax on more Australians, wouldn’t they?’

Mr Abbott responded ‘Well, obviously businesses do pass on costs and if there was a levy that was to fund something, yes that would be a cost.’

So he’s gone from saying he won’t increase taxes to proudly admitting that his tax will slug Australian families at the shops or when they fill up the car with petrol

Tony Abbott likes to talk tough on tax, but he in fact wants to bring almost 1 million Australians back into the tax system by abolishing Labor’s increase in the tax free threshold.

He has also pledged to hit 3.6 million Australians with a $4 billion super tax hike.  This will reduce the retirement savings of low income Australians, including more than 350,000 shop assistants and cashiers, 200,000 food and hospitality workers, and 80,000 cleaners.

He’ll also abolish SchoolKids Bonus – a measure intended to helping with education expenses – taking $1,200 a year from the average family’s budget.

Who could forget the Liberals’ 2010 election costing debacle? They claimed their costings had been audited, but the accountants were fined by the Institute of Charted Accountants for breaching professional standards.

Nearly three years later, not much has changed. The Liberals claim their policies are costed – Andrew Robb says the costings sit in his top drawer. But to this day, they remain secret.

Australian families need to ask: if the Coalition’s policies were good for them, would the Opposition really be keeping them secret?

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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.