Federal election 2016: Labor commitment gap closer to $10bn

Labor is stretched making its revenue and spending commitments add up over the four-year budget period, but the gap is nowhere near the $67 billion claimed by the Coalition.

A realistic estimate of the gap would be closer to $10bn, but much depends on announcements yet to be made and the accounting Labor has promised before the election.

Labor finance spokesman Tony Burke zeroed in on the Coalition’s estimate that Labor’s aspiration to raise foreign aid to 0.5 per cent of GNP would cost $19.3bn over the next four years.

Labor foreign affairs spokeswoman Tanya Plibersek had announced at the weekend Labor would lift foreign aid by just $224 million over the next four years, with a further $490m going to the UN High Commissioner for Refugees and supporting Australian non-government organisations.

The Coalition claims that Labor would reverse the entirety of the $34.6bn in measures that passed the Senate over the past three years, though there is no opposition policy to do so.

The claim that Labor’s new spending promises now reach $30.4bn similarly overstates by including proposals that are not formally on the party’s election platform. For example, it puts a $6.7bn cost on increasing superannuation to 12 per cent, which Labor has not made a commitment to, and $4.4bn on reversing the Coalition’s superannuation savings, which the party is also yet to confirm.

Costings of policies on Labor’s election website add up to about $13.8bn, or less than half the level claimed by the Coalition. Against that, Labor has tax increases and savings measures which, on both the Coalition and Parliamentary Budget Office costings, raise $16.2bn over the next four years.

Where Labor is in trouble is with the cost of policies that are in the budget but which have not passed the Senate. These total $14.5bn, according to Treasury’s pre-election economic and fiscal outlook, while the total value of unlegislated measures improving the government’s finances, including announcements in the latest budget, reach $18bn. Excluding double-counting and policies yet to be debated this still leaves Labor adding about $10bn to the deficit over the next three years.