The release of the Coalition’s much-anticipated costings documents turned out to be a fizzer on Thursday, in more ways than one. Despite declaring Australia faced a budget emergency, Joe Hockey’s budget plan is staggeringly similar to that of Labor: there is only $6 billion over four years between the two parties. It is, as many economists have said, a rounding error. And despite promising full details, what the Coalition released was an eight-page briefing paper. There is $42 billion in cuts and $33.2 billion in new spending, but the document is light on detail and in the eyes of many commentators, credibility. Prime Minister Kevin Rudd has rightly criticised the Coalition for releasing the costings so late in the campaign. It’s been a deliberate strategy, and a shifty one. It’s too late to matter of course, which is exactly what the Liberals wanted. But after so much posturing about responsible economic management, this does the Coalition no credit. Detail-lite as it might be, the costing document does allow us to have a look at the good, the bad, the ugly and the plain silly in the Coalition’s policy basket. The good ■ The Coalition will cut the company tax rate to 28.5 per cent at a cost of $4.9 billion. Good plan, except that the Coalition’s parental leave plan will add 1.5 per cent to some company tax rates for 3200 big businesses (see “ugly” section below). ■ The Coalition will spend $11.5 billion on infrastructure programs. The vast majority appear to be road programs, which is a concern, with several rail projects shelved. However, Abbott has promised to be an infrastructure PM and must deliver. ■ The Coalition will spend $50 million on the Export Market Development Grants. It’s not clear whether this is additional funding, but let’s hope so. ■ There are also no cuts to crucial innovation programs, such as Commercialisation Australia. Good to see those left alone. ■ The Coalition should get a bit of credit for winding up some silly stuff. It will redirect funding for a Labor program to address the “portrayal of senior Australians in the media”, saving $1 million, and discontinue plans to create a no doubt vital diplomatic post in Senegal, saving $14 million. Seriously, who comes up with this stuff? The bad ■ The $9 billion in savings announced yesterday includes a whopping $4.5 billion cut to Australia’s foreign aid. Not a good look as Australia hosts the G20 next year and sits as the president of the UN security council ■ The Coalition has long promised to cut 12,000 public service jobs, but it took another swipe at the bureaucracy with yesterday’s cuts, with $428 million to be saved through yet another “efficiency dividend”. Surely there is a point when not having enough bureaucrats to do the work of government becomes a real problem. ■ The Coalition is intent on killing the carbon tax, but small business will be disappointed to see that carbon-tax related measures will also go, particularly the loss carry back scheme (a genuine bit of tax reform that came from the Henry Tax Review) and the instant asset write-off for assets worth up to $6500. The ugly ■ The Coalition’s paid parental leave scheme stands out here. According to the costings document, it will cost $9.8 billion over the next four years. But the costs will ramp up after Coalition claims spending adjustments at a Commonwealth and State level will soak up $3.3 billion of that, but a staggering $4.4 billion will come from a 1.5 per company tax levy on businesses with over $5 million in taxable income. Not only is this policy stupidly expensive – imagine how much better Hockey’s budget bottom line would have been without it – but the idea of a company tax levy runs contrary to everything the Coalition stands for. The silly ■ The Coalition will spend $20 million on a trial to give marriage planning vouchers to couples. Words fail us. ■ The Direct Action plan that will replace the carbon tax remains a bit of a mystery, with perhaps the most mysterious component being $300 million over four years for the Coalition’s Green Army. Maybe this will turn out to be the most effective “army” ever raised; for now, we’re highly sceptical.
Posted on: Fri, 06 Sep 2013 05:13:11 +0000
Trending Topics
Recently Viewed Topics
© 2015