Saturday, October 19, 2013

11 out of 10. Coalition costings pass muster, for now

It's better than last time

The Coalition has received a clean bill of health on its election costings, with the Parliamentary Budget Office finding that if anything it understated the boost they will give to the budget.

The finding is in stark contrast to that of Treasury and the Finance Department three years ago which found errors and questionable assumptions in the Coalition’s policy costings amounting to $11 billion.

The Office is required to produce an independent assessment of the costs of each of the major parties promises within 30 days of a change of government.

If finds the Coalition’s policies will save the budget $7.15 billion over four years, rather than the Coalition's $6.09 billion the Coalition had claimed. The figure is an “underlying cash balance” measure of the kind most widely used to describe whether a budget is in deficit or surplus.

But looking further ahead the Office sees problems. It says the promise to more generously index military superannuation pensions will grow from around $30 million per year to peak at $460 million in 2046-47. The saving from delaying the by two years the scheduled increase in compulsory superannuation will climb from the claimed $875 million per year to a peak of $1.15 billion before sliding to just $80 million per year from 2023-24.

Other savings penciled in by the Coalition are unlikely to come in as early as it and the Office have assumed...

It has booked savings this financial year from abolishing the Schoolkids Bonus and axing the Regional Infrastructure Fund, measures which might not pass through the Senate.

Treasurer Joe Hockey said the finding “once and for all puts to bed the lies from the Labor party over numerous years that there was a black hole in the Coalition’s costings”.

Shadow Treasurer Chris Bowen said the true state of the government’s books wouldn’t be know until Treasury released the mid-year budget update due in December.

He said the analysis confirmed that over three million low income earners would lose the Low Income Super Contribution and that the public service would be cut at the rate of one job an hour for the rest of the financial year.

In The Sydney Morning Herald

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