A $67 billion black hole in Labor’s spending and budget commitments shows that Labor simply can’t pay for the promises they are making to the Australian people at this election.
Labor is making promises to spend money that isn’t there, which will mean they will fail to deliver or impose even higher taxes and larger deficits and debt on the Australian people just as they did last time in Government, when in just two years they turned a $20 billion surplus inherited from the Howard Costello Government into a $54.5 billion deficit.
As every day passes in this election campaign Bill Shorten is digging an even deeper hole as he continues to announce more and more spending, adding to the spend-o-meter he ridicules, with nothing to pay for it.
Over the next four years, using consistent methodologies with the Budget, Labor have identified $16 billion in budget improvements, including $14 billion in higher taxes and just $2 billion in savings. This includes higher taxes on small and medium sized businesses by not proceeding with the Government’s tax cuts as well as their changes to negative gearing and capital gains tax, tax increases on superannuation and multinationals. None of these additional taxes are being used to reduce the deficit. They are intended solely to chase higher levels of spending.
The problem for Labor is that these measures don’t even make up for all the budget improvement measures they have been blocking or have said they would oppose as the Government has sought to repair the damage left by Labor the last time they were in office.
Before Labor can spend a cent on additional spending commitments they must first pay for not proceeding with $18 billion in budget improvement measures that form part of the Government‘s budget and forward estimates they have failed to support - improvement measures they have blocked in the Senate or said they would oppose. This $18 billion figure was confirmed in PEFO.
This means that Labor have spent all of their budget measures simply trying to pay for the things they oppose. There are no additional funds left over to spend on anything new. They have run out of cash even before they start. In fact they are $2 billion behind.
In addition Labor have already made more than $30 billion in additional promises.
And there are $35 billion in savings measures that the Government has been able to bank, but which Labor says needs to be restored as spending.
This creates a cumulative deficit, or black hole, over and above what is currently in the Budget of $67 billion. Over ten years this increases to almost $200 billion.
The challenge for Labor is to identify which of the saving measures they have opposed and are identified in this analysis they now intend to support, or which items of expenditure they have previously committed to they have now chosen to walk away from.
Bill Shorten thinks he can campaign simply on spending money that isn’t there. But Australians know that his black hole of unfunded promises is just getting bigger and that Labor cannot be trusted to manage the nation’s finances.
The only way Labor can pay for their spending addiction is by raising more taxes or running up more debt.
Labor is spending money they simply don't have.
This means every time Bill Shorten's lips are moving and he is spending more money, he will have to tax Australians even more than he's admitting to now, more than the $100 billion in additional taxes over ten years he has announced so far.
This is not a plan for economic growth and jobs.
The difference between the Government and the Labor party is that our spending commitments are paid for by savings, not by higher taxes.
The independent Pre-Election Economic and Fiscal Outlook 2016 (PEFO) confirmed the integrity of the Budget delivered on May 3 and that the Turnbull Government is on track to bring the Budget back into balance as projected.
Labor’s high tax and high spend election spree is a risk to our transitioning economy Higher taxes and higher spending.
A re-elected Turnbull Government will continue implementing our national economic plan for jobs and growth from day one to ensure Australia continues to successfully transition from the mining investment boom to a stronger, more diversified new economy.