A Coalition government would drive the budget deeper into deficit over the coming two years, as the shadow finance minister, Jane Hume, insisted her party’s plan to save $17.2bn by slashing the number of Canberra-based public servants by 41,000 through “natural attrition” was achievable.
If returned to power, the Coalition would gut a long list of environment and clean energy programs, including scrapping the Net Zero Economy Authority, reversing Labor’s tax breaks for electric vehicles, and redirecting money slated for the home batteries program.
Reversing tax incentives for green hydrogen would save $1.5bn over four years, and not proceeding with Labor’s critical minerals production tax credits would save $1.2bn, the Coalition’s election policy costings show.
Separately, a Coalition government would provide $36.4bn in equity investments to deliver two government-owned power plants by 2035, and a further $118bn out to 2050 to build out a nuclear power industry.
All up, the election policy costings showed a $13.9bn improvement over four years versus Labor.
As Jim Chalmers slammed the costings as a “cruel con job” that failed to properly account for the drain on the public purse from the nuclear power plan, Hume told a press conference “we want to offer Australians a clear choice at this election”.
“A choice between responsible economic management or between Labor’s reckless spending. A choice between lower and simpler and fairer taxes, or Labor’s ever-increasing tax burdens. A choice between higher living standards and Labor’s lower living standards,” Hume said.
Echoing American policy developments since Donald Trump came to power, Australia’s foreign aid budget would be cut by $813m over four years through an efficiency drive, excluding assistance in our region.
In a sign of growing frustration about the Coalition’s campaign, one Liberal backbench MP said the cuts to foreign aid betrayed “a core Liberal value” that stretched back to Robert Menzies.
“Investment in foreign aid is not a ‘nice to have’,” they said, within hours of the savings being announced. “It is a key component of our identity as a compassionate neighbour and nation. That must and should continue to extend to Africa and South East Asia.”
The Coalition’s list of more than 200 policy costings included raising $3.6bn over four years by allowing vaping products to be sold in supermarkets and convenience stores, and taxing them like cigarettes.
While there was no budgeted spending slated to build nuclear power plants, there was tens of millions of dollars to pay for government bodies as part of the nuclear plan, including $93.7m over four years to create a nuclear energy coordinating authority and national nuclear training facility and fuel laboratory.
With a pledge to lift the moratorium on nuclear power, there would also be $87.5m to build community support for “zero emissions nuclear technology”.
The Coalition’s claim that it would save $17.2bn over four years by slashing the number of public servants in Canberra by 41,000 has come under heavy scrutiny during the campaign, and the shadow finance minister was again forced to defend the target.
“We have worked closely with the PBO [Parliamentary Budget Office] on this and our advice is that … a hiring freeze and natural attrition will allow us to achieve the 41,000 reduction in ASL [average staffing level] over five years. That is the most important thing. We aren’t expecting voluntary redundancies,” she said.
The comments contradict the Coalition’s campaign spokesperson, James Paterson, who has said “we’ve always left open the option, if necessary, that we will use voluntary redundancies”.
Hume also claimed the cuts would come from 110,000 Canberra-based bureaucrats in mid-2024, against Australian Public Service Commission figures showing about 70,000.
Guardian Australia understands the 110,000 figure is based on Australian Bureau of Statistics figures which include military personnel and reserves – despite the Coalition explicitly exempting these workers from the proposed cuts.
Even as Angus Taylor slammed Labor’s “decade of deficits”, he confirmed that the $15.4bn spent on a one-off tax refund and a temporary halving of the petrol excise would leave the nation’s finances further in the red over the coming two financial years.
“The Coalition has set out a very clear, responsible, credible economic plan to restore our nation’s finances, to strengthen our economy, to tackle inflation, and to get Australia on track,” Taylor said.
Chalmers said there were “at least five substantial holes in the Coalition’s costings”.
“They haven’t provided anywhere near enough for their nuclear reactors. They’ve got their numbers wrong on their job cuts in the Australian public service. They’ve got their numbers wrong on their long lunches policy, on their petrol policy and on their mortgage deductibility policy as well,” the treasurer said.
The Coalition estimates allowing first home buyers to claim mortgage interest on tax for five years would cost $1.3bn over four years, while allowing small businesses to claim work-related meals for two years would cost $243m.
EY Oceania’s chief economist, Cherelle Murphy, said there was no evidence of a long-term plan to fix the country’s finances.
“The trajectory for the underlying cash balance is for a continuation of deficits over the coming four years and, when combined with the significant long-term cost of the Coalition’s nuclear plan, there is no structural fiscal repair presented in these costings,” Murphy said.
“That means that while the government debt trajectory may be a little better than under current policy settings and compared to the ALP’s plan, debt will continue to rise for some time,” she said.
