Serious errors in Coalition Budget show they're just not up to it
Chris Bowen,Lindsay Tanner,Wayne Swan
posted Wednesday, 18 August 2010
The Liberal Party’s economic credibility is in tatters.
Their budget figures released today contain serious errors that demonstrate that not Mr Abbott, Mr Hockey nor Mr Robb have even the most basic understanding of the budget or the judgement necessary to manage the economy.
Their claimed budget surpluses are propped up by phoney savings and a number of very basic accounting errors unbefitting an alternative government, such as:
· A $3 billion hole in their budget from spending funded from the Nation Building Funds has not been factored into their bottom line. Every single cent spent from the Health and Hospitals Fund, the Education Investment Fund, and the Building Australia Fund hits the budget bottom line, but the Coalition have failed to account for any of this.
· An $800 million hole in claimed interest savings from pulling the plug on the National Broadband network. The Liberal party cannot claim more in interest savings than the amount that is actually factored into the Budget bottom line.
· A $402 million hole from grants that they claim will be funded from the Nation Building program which is fully allocated. The Coalition needs to state which infrastructure projects they will not proceed with in order to fund their new commitments.
· They have overstated savings from the sale of Medibank Private, by failing to account for the millions of dollars lost in foregone dividends on privatisation of Medibank Private.
The simple fact is only Treasury or Finance are fully equipped to tell us what the full budget impact of the Coalition’s policies would be.
That is why the Charter of Budget Honesty was set up by Peter Costello in the first place.
The independent accounting firm has itself stated that the figures released today by the Coalition are based on assumptions provided by the Coalition, and have not been independently tested.
WHK Howarth’s letter says: “the Coalition has provided access to the assumptions used to determine the cost of individual initiatives. WHK Howarth has reviewed the complete set of recurrent and non-recurrent policy commitments and savings, and is satisfied that based on the assumptions provided, costed commitments and savings have been accurately prepared in all material respects.”
Mr Abbott might have got someone to check his spreadsheet, but unless he provides full details of his costing assumptions for each of his hundreds of election promises, Australians cannot have the confidence to trust that he will ever balance the budget.
Just days out from an election, and in a last-ditch attempt to plug their budget black holes, the Coalition has also announced new cuts to vital services without providing Australians with any detail at all.
Mr Hockey and Mr Robb today revealed that they would strip $1.2 billion from the Pharmaceutical Benefits Scheme, which will increase the price of drugs for our pensioners, our lowest income earners and Australian families.
Under Mr Abbott’s cuts, pensioners and concession card holders could be slugged around $28 extra per year in the cost of their prescription drugs.
Mr Abbott has also cut almost $1 billion extra from apprenticeship training programs. Combined with cuts they have already announced, this would abolish 461,000 places for apprentices, trainees and other workers trying to build their skills to get and keep a good job.
It would also mean more than 80,000 people who are already in training, apprenticeships and traineeships would have public funding for their training cut part way through their training.
How can Mr Robb and Mr Hockey claim these cuts won’t impact on services for Australian families?
Mr Abbott cannot be trusted with the Budget. He does not have the judgement or the understanding to run the economy or the country and his dodgy numbers have proved that again.
Tags: budget, Coalition, deficit, hole, Howarth, Liberal