Federal Budget 2016: Malcolm Turnbull’s hidden election war-chest

MALCOLM Turnbull will dip into a $1.6 billion war-chest hidden in his Budget to fund announcements in a two-month long election campaign that he says he will win.

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MALCOLM Turnbull will dip into a $1.6 billion war-chest hidden in his Budget to fund announcements in a two-month long election campaign that he says he will win.

But the Prime Minister will face a new attack over the lack of help for average income Australians, with Bill Shorten branding the Budget a plan for “millionaires”.

The two leaders are locked in a battle over “fairness” as both sides aim at winning votes from middle Australia.

Mr Turnbull is set to call the election this weekend, saying he was “quietly confident” he would lead the Coalition to victory on July 2.

He will have close to $1.6 billion to help, with Budget papers revealing three years of payments for “decisions taken but not yet announced”.

The secret spending plans – which will cost about $477 million in 2016-17, $625 million the following year and $502 million the year after – will be revealed before the election. But the expenditure will be eclipsed by yet-to-be-revealed cuts of close to $2 billion to hit in 2019-20, the Budget papers show.

Both the extra spending and savings have to be revealed in a pre-election update by Treasury, due 10 days into the election campaign.

Mr Shorten will outline his alternative economic plans tonight, focusing on average income earners who will lose out from a series of measures in the Budget.

Labor will support some elements of the Budget including an increase in the second tax rate from $80,000 to $87,000 even though Mr Shorten dismissed it as worth “a cup of coffee and a biscuit” for those earning between those amounts.

Accusing the Government of favouring the rich, Mr Shorten said the tax cut would equate to about $315 a year for those earning between $80,000 and $87,000, while someone on $1 million would pocket $17,000 a year and those earning below $80,000 would get nothing. In his Budget reply, Mr Shorten will confirm a plan to increase taxes on the richest Australians through a vision that he says is fairer to average workers.

Under Labor’s plans, those on more than $180,000 will be hit with a 2 per cent tax hike by keeping the “deficit levy” that is due to expire in July next year.

Mr Shorten will back the Government’s superannuation tax hikes but is unlikely to entirely match the plan to cut company tax over the next decade.

Labor yesterday attacked the Government for only detailing the cost of the planned company tax cuts over the four-year budget estimates period and not the full decade.

Parliamentary Budget Office costings of a similar plan to cut company tax to 25 per cent within a decade, seen by The Courier-Mail, suggest the policy will cost $16.5 billion a year by 2026-27.

In a fiery Question Time, Mr Shorten accused Mr Turnbull of being out of touch, after the PM told a radio presenter he should buy a house for his children. Mr Shorten said Mr Turnbull’s advice for young Australians struggling to buy their first home was to “have rich parents”.

But the PM accused Mr Shorten of mounting a “political war” against ambition and “sneering at hardworking Australians who seek to make something for their children”.

Originally published as Federal Budget 2016: Malcolm Turnbull’s hidden election war-chest