Labor claims bigger surpluses, but climate cash hole emerges

Labor is claiming the mantle of the better economic managers, handing down costings projecting $57 billion in surpluses in the next four years, even as it appears there is a $100 million hole in its climate change policy costings.

LABOR is claiming the mantle of the better economic managers, handing down costings projecting $57 billion in surpluses in the next four years, even as it appears there is a $100 million hole in its climate change policy costings.

Opposition treasury spokesman Chris Bowen announced “bigger, better budget surpluses” over the next four years, growing to $21.7 billion in 2022-23.

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But Treasurer Josh Frydenberg says more than $140 billion in commitments are not fully accounted for over the decade in the costings — which Labor has denied, saying it was based on bad assumptions.

Labor’s out-years budget bottom line assumption is propped up by an assumption that health funding would drop back down to 45 per cent contribution, despite its promise to increase its share to 50 per cent.

Opposition treasury spokesman Chris Bowen talks with the costings panel in his office. Picture: Rohan Thomson/AAP

Labor says the $620 million cost of its climate change policies will be more than offset by scrapping the Government programs and making money from interest on loans from the Clean Energy fund.

But one of the biggest offsets, saving $448 million over four years by abolishing Climate Solution Fund, appears to be over-estimated by $95 million.

There is only $189 million budget for in the CSF over the next four years, while there is $164.9 million budgeted for in its predecessor the Emissions Reduction Fund, leaving the $95 million unaccounted for.

But Labor is standing by its figures, which were costed by the Parliamentary Budget Office.

Mr Bowen said there will be $17.17 billion more in surpluses delivered by a Bill Shorten Government than forecast by the Coalition in the next four years.

“We can deliver these bigger budget surpluses and the bigger investments of health and education while also assuming tax relief going forward,” Mr Bowen said.

Labor’s finance spokesman Jim Chalmers said it was the “biggest lie” of the campaign that the Coalition were better managers of the economy.

“Saying that the Liberals have done a good job of managing the economy is a bit like saying that Clive Palmer did a good job building a dinosaur park,” he said.

Mr Frydenberg dismissed the projected surpluses, comparing them to the “mythical surpluses (former Labor Treasurer) Wayne Swan is still searching for”.

“There is a big black hole in Labor’s costings, with their failure to account for the increase in spending that they have promised,” he said.

Coalition modelling suggests the costings do not account for $39 billion if Newstart was to be upped by $75 a week, $68 billion if foreign aid was upped by 0.5 per cent of gross ­national income, and $35 billion to increase the ­research and development funding to 3 per cent of GDP.

Labor confirmed earlier projections that its negative gearing, trusts and franking credits reforms would raise $154 billion more in revenue.