Don’t look now, but there’s another hole in the Coalition’s numbers. But don’t worry, it’s only $4 billion. “Finding savings is a big task but we’re up for it and will release all our costings in good time for the next election,” Tony Abbott declared at the Press Club on Tuesday. He went on to say:
“Not proceeding with the carbon tax would deliver $31 billion in savings over the forward estimates period with a net improvement of $4 billion in the budget bottom line.”
The $31 billion figure, of course, is what will be spent by way of free permits and compensation under the scheme; Abbott failed to note that not proceeding with the carbon tax would also lose about $27 billion in revenue, but no matter.
But his numbers are now wrong. The net cost of $4 billion was revised back to $3.3 billion in MYEFO, which adjusted the costs of household compensation and, crucially, shifted even more expenditure associated with the package into this financial year as part of Wayne Swan’s pea-and-thimble trick to shore up next year’s surplus.
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As a result, there’s a net $3.3 billion in savings only from the carbon pricing package over the forward estimates, not $4 billion. And $3.1 billion of that is being spent this year. So Abbott’s $4 billion in savings is actually $3.3 billion and only available if somehow he gets into office before June 30 and halts compensation payments.
In fact even if the Coalition wins an election held in the second half of 2013, it won’t be able to save a single cent, because the net spending associated with the carbon pricing package will have been completed by the time the Coalition could repeal it — assuming they could do so without a double dissolution election, before July 2014. And that’s actually the point where the carbon pricing package starts returning money to the budget, rather than costing money.
The funny thing is, Abbott continues to call the carbon pricing package a tax but in the same sentence says that repealing it would save the government money — unlike any other tax in history.
Of course, if he’d picked up the excellent point made by South Australian senator Simon Birmingham about why the government continues to refuse to reveal the fiscal implications of the package beyond the forward estimates, when it did the same for the CPRS out to 2020, he’d have been on much safer ground.
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With employment falling away for university and technical school graduates and the less well endowed only getting temporary jobs the intelligence lacking politicians of the realm are not facing their responsibility. We need money to provide graduates with research capacity to innovate. The global warming is upon us and the nature of habitation is changing. In Australia we have to go where the work is … lik where the oil, gas and mining developments are. Is Infrastructure Australia actually going into the office ? Doesn’t seem like it.
Perhaps small rounding errors of this kind will be blamed for inability to deliver aspirational prospects. Just a guess.
Anoterh example of the shoddy figures that left the coalition with an $11b black hole at the last election. How can anybody take their economic credentials seriously?!! It is past time the media started putting the spotlight on to these ridiculous statements.
The myth that Labor cant manage our economy continues in the popular press and typical Australian mind. When the rest of the world is sufferring so badly still from the GFC; and with independent bodies rewarding Swan and his team as the best Treasurer in the world at the moment….
nah… who cares?… The Herald Sun says something different – so our govt must be useless – right?
And soon the Age might start saying the same thing now that its largest single share holder hates the mining tax and wants the liberals in power.
I predict that the Coalition in power will see even more redistribution of wealth in this nation from the many to the few (just as it did when it held power for a decade until 2007). The wealthy minority will continue to own more and more of the resources and wealth of the land, and it will certainly not be shared or redistributed for the common good. The sense of ‘entitlement’ that the wealthy feel is theirs will be deepened and the aspiring middle class who naively believe they can one day join the elite… will allow it all to happen.
Thankyou Bernard, I thought there was something dodgy about Tony’s figures. He seemed a bit off with the implementation cost of his carbon reduction scheme as well.
Just a lot of motherhood statements really together with same old same old….. Everything was rosy under Howard and I’ll return us there, I’ll reduce government waste and inefficientcy, I’ll reduce spending to take pressure off interest rates ( aren’t mortgage rates pretty low as it is and don’t self funded retirees want rates to go up?), I’ll cut taxes and get people off the dole and DSP, and I hope to implement denticare and disability insurance one day when everything’s fixed up by our superior financial team. The sad thing is he’s serious. Oh, and I’ll stop the boats. Yawn Yawn.