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Eslake numbers on Coalition costings wrong

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Media Release

Senator Mathias Cormann Shadow Assistant Treasurer Shadow Minister for Financial Services and Superannuation Coalition Campaign Spokesman

Friday 23 August 2013

Eslake numbers on Coalition costings wrong

The Coalition has a high regard for Mr Saul Eslake as an economist, but his assessment of the Coalition’s costings and savings task is wrong in some fundamental ways.

What Mr Eslake has done is expose Labor’s lie about their dishonest and widely discredited assertion of ‘$70 billion in cuts’. Nevertheless, Mr Eslake is not right to say that there is still a further $30 billion of savings to be found by the Coalition. In fact, the Coalition’s remaining savings task is far below what Mr Eslake has indicated.

We do appreciate that, unlike the Parliamentary Budget Office, Mr Eslake is not fully acquainted with all of our policy detail, our assumptions or indeed relevant Treasury data.

As such, there are some basic errors in Mr Eslake’s calculations.

For example:

 Our proposal to rescind Labor’s increase in the humanitarian intake from 13,750 to 20,000 is costed at $1.3 billion, not the $450 million indicated by Mr Eslake. This figure is not in dispute between the Government and the Opposition given it is consistent with Labor’s costings in their own budget papers.

 Our proposal to reduce the size of the public service by 12,000 - through natural attrition - has been costed by the Parliamentary Budget Office at about $5 billion over the forward estimates, not the $2 billion indicated by Mr Eslake.

 Our proposal to delay the full phase-in of compulsory super to 12 per cent by two years will yield initial and ongoing savings beyond the two years estimated by Mr

Eslake. The saving over the forward estimates is about $2 billion - based on the policy detail announced by Tony Abbott in his Budget-In-Reply speech in May - not the $500 million indicated by Mr Eslake.

 In relation to our commitment to scrap the carbon tax there are significant gaps in Mr Eslake’s analysis. While we have committed to fund income tax cuts and pension increases without a carbon tax, obviously, once the carbon tax has been abolished, there will be no need to provide subsidies to industry to compensate them for the impact of the carbon tax.

There are a range of other errors and miscalculations in the document released to the market by Mr Eslake.

The Coalition will continue with our careful, methodical and structured costings process, drawing on the expertise of the Parliamentary Budget Office and our panel of three eminent experts.

In good time before the election we will release the full list of our policies and their cost, the full list of our savings measures and their value, and what it will show is that the Budget will be better off under the Coalition than under Labor.

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