The $70 billion question
Peter Martin and PolitiFact run a ruler over the claims and counterclaims of Kevin Rudd and Tony Abbott. Today - Labor asserts that the coalition has a massive funding hole.PT2M47S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-2r8nj 620 349 August 5, 2013
"The Coalition, to return the federal budget to as a good a position as the government's, at minimum, would have to make $70 billion worth of cuts."
Penny Wong, finance minister, August 3 press conference
Finance Minister Penny Wong's claim of a $70 billion Coaliton black hole is false.
Senator Penny Wong says the Coalition would have to make $70 billion of cuts to pay for the election promises it has made so far. Prime Minister Kevin Rudd, in announcing the September 7 election date, also warned about the Coalition's ''cut to the bone'' plan, using the same number.
It's Labor's number, not the Coalition's because the Coalition says it won't release one until later in the campaign. As it happens it's curiously similar to one the Coalition has used in the past.
Its treasury spokesman, Joe Hockey said two years ago, ''finding 50, 60 or 70 billion is about identifying waste and identifying areas where you do not need to proceed with programs''.
Its finance spokesman Andrew Robb said he would ''need to identify up to $70 billion over the next four years if we are to get this economy back in some sort of shape''.
Labor has backed it up with an eight-page document that goes line by line through what Senator Wong says are the 19 Coalition promises announced so far. But the biggest ($19.7 billion) isn't a promise at all. Labor calls it ''2010 savings no longer available to offset policies''. In its words: ''To fund policies announced in the 2010 election the opposition put forward a number of savings. However, many of these savings are no longer available.''
Some of those savings are no longer available because the timeframe has passed, others because they were promises to abolish programs that Labor has since abandoned.
Does it stack up?
It is hard to see why this historical footnote should be regarded as a cost to be added to a claimed net $50 billion of other costs for policies the opposition is actually proposing.
Mr Hockey says its ''double counting''. As he puts it, ''there is no sense in which the lapsing or adoption of old savings measures damages the budget bottom line''.
Senator Wong's office defends including the figure by saying Mr Hockey has regularly referred to his previous savings target. But he isn't referring to it now. In recent days he has merely promised to deliver a better bottom line than Labor.
Which is how Senator Wong framed her statement: ''The Coalition, to return the federal budget to as a good a position as the government's, at minimum, would have to make $70 billion worth of cuts.''
It wouldn't. The $19.7 billion budget cost, the biggest in Labor's list, shouldn't be there.
The Coalition would need to deliver about $50 billion of savings to pay for its promises, not Labor's claimed $70 billion – and that's if the rest of its costings are accurate. Not all of them are.
Labor has costed Opposition Leader Tony Abbott's promise to lose 12,000 public servants through natural attrition over the next two years. It says it'll only save $2.8 billion.
That's a total that implies an implausibly low cost per public servant. Mr Hockey's office has shared with PolitiFact a costing from the independent Parliamentary Budget Office that finds the saving more like $4.8 billion than $2.8 billion.
And some of Labor's other estimates are guesses. For instance, the Coalition hasn't released its dams and water management policy. Labor says it will cost $2 billion.
Frustrated by the Coalition's reluctance to release a thorough costing of its election promises to date Labor has come up with one of its own.
Conveniently it totals $70 billion, which is a figure the Coalition itself has tossed around in the past.
But some $20 billion of it shouldn't be there, and billions more are the result of guesses, not all of which will turn out to be right.
Politifact rates the statement "false".
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