Updated Net Budget Impact of Election Policies
Chris Bowen,Lindsay Tanner,Wayne Swan
posted Saturday, 31 July 2010
Federal Labor today released the updated net budget impact of the Gillard Labor Government’s election commitments.
Labor will continue to update the net budget impact of its election commitments to ensure that voters are fully informed when they vote on 21 August.
The Prime Minister has committed that by election day:
• All our commitments will have been fully offset over the forward estimates – meaning not a single cent is added to the overall budget bottom line.
• All our policies will be submitted for costing under the Charter of Budget Honesty.
As part of this commitment, Federal Labor today announced $837.5 million in additional savings. This takes total savings announced during the campaign to $1.6 billion.
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A re-elected Gillard Labor Government will continue to drive efficiencies in the public service through maintaining the annual efficiency dividend on departmental expenses at 1.25 per cent, saving $390 million over the forward estimates. Efficiencies gains will be realised without resorting to job cuts.
In contrast, Tony Abbott’s irresponsible recruitment freeze will cost 12,000 jobs, undermine key frontline services and, based on Treasury advice, put at risk at least $2.1 billion in revenue.
The efficiency dividend is currently scheduled to reduce from 1.25 per cent to 1.00 per cent on 1 July 2011.
The decision to maintain the efficiency dividend at its current rate does not affect the Federal Labor’s commitment to implement the Ahead of the Game – Blueprint for the Reform of Australian Government Administration recommendation to review the current mechanisms to drive agency efficiency.
The Gillard Labor Government will also remove funding currently quarantined under the Gershon reforms for Information and Communications Technology (ICT) spending across Government, saving $447.5 million over four years.
Federal Labor sees ICT as vital in promoting the sharing of common service delivery platforms and business processes. Our ICT reforms have increased efficiency in procurement and delivered more than $1 billion in savings. Half of these savings had been quarantined for new ICT spending across Government.
Going forward, Departments will now have to bid in the budget process for additional resources to fund ICT spending to ensure it is properly scrutinised against other Government priorities. We will retain the Secretaries Committee on ICT to promote the whole-of-government agenda and drive improvements in the quality of projects coming forward.
Federal Labor welcomes the submission of 17 of the Coalition’s policies to the Departments of Treasury and Finance under the Charter of Budget Honesty, even if this occurred when they thought no one would be watching, five days after Mr Hockey’s own deadline of the Pre-Election Economic and Fiscal Outlook.
We note however, that of the $20.9 billion in new spending commitments made by Tony Abbott, only $93.1 million, or less than one half of one per cent have been submitted for independent costing under the Charter of Budget Honesty.
What exactly does Mr Abbott have to hide?
The policies which have gone missing in costing action include:
• The Coalition’s Education Tax Refund Policy – claimed cost of $760 million over four years – announced on 21 July 2010.
• The Coalition’s Paid Maternity Leave Scheme – claimed cost of $8.1 billion over the forward estimates – announced on 9 March 2010.
• The Coalition’s Abolition of the National Broadband Network – claimed recurrent saving of $2.4 billion – claimed on 19 May 2010.
• The Coalition’s opposition to the means test on Private Health Insurance - $2.1 billion cost over the forward estimates– announced on 14 May 2009.
Mr Abbott needs to show the Australian people that he can be trusted with the nation’s finances and fully comply with the Charter of Budget Honesty.
Tags: 2010, Election, Federal, Gillard