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Revising the revisions.



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MEDIA RELEASE

AUSTRALIAN LABOR PARTY

Joel Fitzgibbon MP

Shadow Assistant Treasurer Shadow Minister for Revenue Shadow Minister for Banking and Financial Services 18 February 2005

REVISING THE REVISIONS

The Government has had a bad week in terms of the costing of its election promises.

It has been forced to admit that the cost of one its core election commitments, the mature age worker tax offset, has blown out by $400m. The revised costing was included in the explanatory memorandum to bill introducing the offset.

The Treasury model underestimated the number of persons over 55 eligible for the payment. This accounted for almost half of the $400 blow out in the costing.

But last night, in Senate Estimates hearings, Treasury indicated that the costing would need to be revised again!

One of Treasury’s top modellers suggested that the revised costing would need to be ‘revisited’ as the number of persons over 65 in the workforce is increasing. So the cost of the promise will blow out even further.

Treasury also admitted that the Government only gave the Department one day to complete the costing. This hows how much thought really went into this misguided tax measure.

The Government has provided no evidence of the likely impact of this measure on the labour market participation of mature aged workers. And Treasury admitted it had not even modelled this participation effect. So it is reasonable to conclude that there will no real benefits for labour force participation.

All these cost blowouts add to the $66bn spending spree of the Government on election promises which continues to put upward pressure on interest rates.

ENDS

Contact: Joel Fitzgibbon: 0418 293 372 Brendan Long: 0408 421 447