Riddled with Errors: Hockey & Robb's economic plans
Craig Emerson posted Friday, 20 August 2010
On the eve of one of the closest polls in our electoral history, the Coalition economic team lead by Mr Hockey and Mr Robb delivered the document that underpins the alternative economic blueprint of the nation several days late, riddled with a series of errors in the millions of dollars.
Mr Robb’s repeated insistence that the costings were conducted by the ‘fifth biggest accounting firm’ in Australia, that also does ‘a lot of work for the government,’ didn’t inspire a lot of confidence in me when I heard it, and it doesn’t inspire much confidence now. Especially when you read the fine print, which shows the firm did not test or endorse the Coalition’s assumptions, while also making several errors.
Why not subject costings to the truly independent arbiters who pull together the annual Budgets of the Commonwealth of Australia – the Departments of Finance and Treasury? The answer is that the Coalition was afraid of independent, impartial scrutiny of their costings.
Let’s have a look at the costing errors:
- There is a $3 billion hole in the Coalition budget bottom line, which blows their claims about the surplus in one hit. The Coalition claims that money it will spend from Nation Building Funds does not hit the budget bottom line. This is simply wrong. Money spent from these funds does hit the budget bottom line and you would expect somebody who wants to be Prime Minister, or Treasurer, or their accountants, to understand this.
- There is a $800 million hole because Mr Abbott is claiming a greater saving on interest from pulling the plug on the National Broadband Network than exists. He cannot save more than the provision that is actually in the budget, and Treasury advice has exposed that there is $800 million less in the budget than Mr Abbott is claiming.
- Another $402 million hole because Mr Abbott is claiming he will spend money from the Nation Building program. However, the money available for this program has already been allocated.
- Overstating savings from the sale of Medibank Private, by failing to account for the millions of dollars lost in foregone dividends upon its privatisation of Medibank Private.
- Independent analysis by the respected modelling organisation NATSEM has shown that Mr Abbott’s Education Tax Refund proposal has a $377 million hole – that’s a 50 per cent cost blow-out.
I understand that the Australian electorate may find these ‘tit-for-tat’ games tiresome, but it simply should not be ignored when we are talking about what is at stake here. These are the numbers that determine the economic future of the nation.
Don’t forget the hypocrisy of the Coalition. One of Mr Abbott’s relentlessly repeated slogans has been ‘end the wasteful spending’ (because he thinks spending on hospitals and education is wasteful somehow), while in the same breath, stumping up with $1 billion in local pork-barrelling commitments every day of the 35 day campaign, without any explanation of how these commitments will be funded.
With errors of this magnitude, Coalition claims that the surplus will be bigger and debt will be slashed are completely undermined. Indeed, without any plan to boost infrastructure, improve skills, while at the same time ripping away funding from health and education, the Coalition will endanger our future economic productivity. Without productivity gains, we risk our capacity to ensure a surplus.
But all this is of little surprise when Mr Abbott on Wednesday night trivialised the deepest and longest global recession since the Great Depression as something that lasted for only ‘two months’. I can’t imagine any responsible world leader being so dismissive of a recession that cost the jobs of millions of people in Europe and the United States.
Unlike Mr Abbott, Federal Labor has made a case to take the country forward – but we need your support to make it a reality.
Tags: Costings,
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