The spending cuts proposed by the Coalition to date would save $31 billion over four years, according to a partial costings update released by the opposition. Launched at a press conference held while MPs were paying tribute to Helen Haines in the lower house, the document puts dollar figures on pledges to slash Labor climate and housing initiatives and strip welfare from permanent residents.
The fiscal update is unusual at this point of the political cycle, with opposition costings typically finalised close to elections. It is also incomplete, focusing mostly on spending and ignoring the cost of its migration cuts and its pledge to scrap Labor's tax cuts. But the emphasis on proposals to rein in spending is intended to sharpen attacks on Labor's own spending and counter perceptions that the Coalition's policy offering is underdone, according to a Liberal source involved in the process.
"It is absolutely critical at this time to control spending," Opposition Leader Angus Taylor told reporters, framing the savings as a "down payment" to pay for tax cuts.
The $31.3 billion savings package, which has been costed by the independent Parliamentary Budget Office (PBO), comfortably offsets the $9.7 billion cost of the Coalition's income tax policy to index brackets and scrap the $250 workers' tax offset. It is unlikely to offset the rest of the Coalition's policy commitments, including its plans to scrap Labor's tax hikes on capital gains, negative gearing, trusts, and high-balance super accounts, slash net migration to 100,000 for two years, and lift defence spending.
More than half of the $31 billion in cuts comes from slashing climate-related policies. Those costs have only been broken down into two large bundles, rather than itemised. Taken together, $9.4 billion would be saved by ditching the new vehicle efficiency standard, the electric vehicle (EV) discount, home battery subsidies, the net zero advisory body, some functions of renewables agency ARENA, and Scope 3 emissions reporting for business. Another $7.3 billion would be saved by ending subsidies for green aluminium and hydrogen, critical minerals, and other industrial subsidies through Labor's National Reconstruction Fund.
Abandoning Labor's first homebuyer scheme Help to Buy, its social housing fund, its tax incentives for build-to-rent developers and its payments to states who meet housing supply targets would save a combined $4.7 billion. Stripping eligibility for welfare payments and the National Disability Insurance Scheme to permanent residents and other non-citizens would save $2 billion over four years.
As previously announced, the PBO estimates that slashing the tobacco excise and legalising vapes would save $7.9 billion over four years, in part because of an assumption that smokers would switch back to the legal cigarette market.
The opposition blames government spending, which is at historically high levels, for persistent inflation. "The government is absolutely addicted to spending and [why] Australian household mortgage rates are going up," Shadow Treasurer Tim Wilson said today.
In an interview with Nine newspapers, Treasurer Jim Chalmers said the government was budgeting "responsibly" and would outline fresh savings measures in December. "That will be the ninth consecutive budget update from this government that will have savings in it ... That's one of the reasons why the budget is in better condition now than it was expected to be a few years ago," he said. Mr Chalmers denied government spending was to blame for inflation, noting private demand was growing faster than public demand. "I think that tells us there are other factors at play ... Of course, there'll be commentators who say that we should cut harder and faster ... They should nominate, I think, those areas that should be cut more substantially."
The Reserve Bank's monetary policy board meets next Tuesday to consider whether to further increase the cash rate. The bank's deputy governor Andrew Hauser said last week inflation was "materially worse" than expected.