LABOR has pledged bigger budget surpluses as far as the eye can see while promising to look at further personal income tax cuts in the future when the nation’s finances allow.
But Prime Minister Scott Morrison was quick to remind voters of previous budget promises by the federal opposition.
“There’s always something very fishy when it comes to Labor’s claims about how to manage money and I think that’s what we’re seeing here again today,” Mr Morrison told reporters in central Queensland on Friday.
Shadow treasurer Chris Bowen and Labor’s finance spokesman Jim Chalmers released the party’s policy costings on Friday, eight days from polling day on May 18.
“Because of our policies, the Shorten Labor government will deliver a bigger budget surplus each and every year. Next year and beyond,” Mr Bowen told reporters in Canberra.
The costings, which have been scrutinised by the independent Parliamentary Budget Office and a panel of accounting experts, show a forecast surplus of $7.4 billion in 2019/20, growing to a projected surplus of $21.8 billion in 2022/23.
This compares with Treasury and Finance’s respective predictions of $7.1 billion and $9.2 billion in the Pre-election Economic and Fiscal Outlook, which was released in the first days of the election campaign.
The 2022/23 surplus would also represent one per cent of gross domestic product, four years earlier than the government is forecasting.
This improvement relies on Labor’s planned changes to negative gearing and capital gains tax, ending cash refunds from franking credits, and among a range of clampdowns on tax concessions totalling $154 billion over the next 10 years.
It also aims to raise $6.3 billion by re-introducing a budget repair levy on high-income earners.
But the biggest saving comes from reversing the government’s tax cuts planned for 2022/23 and 2024/25, which amount to $285.8 billion over the next decade.
Mr Bowen said when budget surpluses reach a sustainable level, only then can tax relief be delivered “prudently and sensibly”.
“I agree with (former Liberal treasurer) Peter Costello, it should be delivered term by term, budget by budget,” Mr Bowen said.
Among Labor’s long list of spending promises, $15.9 billion will go to cheaper child care over the next 10 years, $59.3 billion for tax cuts for low- and middle-income earners, $16 billion for schools and $9.3 billion for pensioner dental care.
Federal Treasurer Josh Frydenberg said Labor hasn’t explained the potential effects of its costings.
“What the Labor Party fails to do in these costings is explain the major and detrimental economic impact these higher taxes will have across the economy,” he told reporters in Melbourne.
“We have been able to strengthen the Australian economy.”
Finance Minister Mathias Cormann said Labor had produced a “con job” in failing to properly account for promises on foreign aid, hospitals, boosting the refugee intake and increasing science spending.
However, the Labor policy document showed $1.18 billion more in foreign aid, $96 million extra for refugees, $1.3 billion for hospitals and a number of science-related measures.