Allegra Spender urges Labor to review government spending programs

Teal MP Allegra Spender has called for Labor to examine whether the nation is getting the economic returns from big spending investments, including in education and the NDIS.

Independent MP Allegra Spender. Picture: NCA NewsWire / Martin Ollman

Independent MP Allegra Spender has warned a projected blowout in government spending is “almost impossible to justify” given Australia’s low level of unemployment and diminishing economic returns for the community.

The intervention comes as opposition Treasury spokesman Angus Taylor urged Labor to use an expected income tax windfall of more than $90bn in the upcoming budget to help “pay down debt, not spend more” and chart a pathway back to surplus.

“If the government can’t deliver a strong surplus with the current strong commodity prices and the strong economy left to it by the Coalition, when will it ever deliver a surplus?” Mr Taylor said.

In an opinion piece published by The Australian, Ms Spender expresses concern at the growing cost of the NDIS, education and the inland rail project and calls for an effective audit of government programs to be conducted.

“Transparent critical analysis of the value created by each government program would provide a way to assess the real value of government spending,” she said. “Programs which fail to create benefits, on net, should be reformed or closed.”

Ms Spender, a teal independent who won the affluent electorate of Wentworth in Sydney’s east from the Liberal Party at the 2022 election, said that spending was on track to hit 27 per cent of GDP.

“When you look at how we are spending that money, and the outcomes it is creating, it becomes almost impossible to justify,” she said.

Ms Spender said national literacy and numeracy standards had gone backwards “at the same time as record increases in funding” and the NDIS, while providing support to families, had “blown out from its original estimated cost of $13.6bn at maturity, to $33bn today, and to $50bn plus in 2026”.

“There is a strong moral case in favour of improving the effectiveness of our spending, and of finding efficiencies, rather than increasing the burden on taxpayers,” she said.

Ms Spender, who recently held a tax roundtable of experts including former Treasury secretary Ken Henry, said she wanted to advance the national discussion on tax reform.

She warned the current tax system did not drive innovation or economic dynamism. “We have taxes like stamp duty that distort important decisions on housing – it isn’t efficient,” she said. “GST and fuel excise taxes are shrinking as proportion of the tax take and there is no plan to deal with the consequences – it isn’t certain.”

The Coalition on Tuesday also released a five-point plan ahead of Jim Chalmers’ May 9 budget, urging the government to provide measured relief for small businesses and families, restore fiscal discipline, avoid higher taxes and deliver stronger action on productivity.

Mr Taylor said Labor’s October budget delivered the “weakest fiscal strategy in recent times”.

He urged the government to take “tough decisions on spending and not raise taxes that will kill aspiration, hurt families and delay investment”.

“Labor increased spending by $115bn, made the structural deficit worse and abandoned all goals of balancing the budget. This isn’t fiscal responsibility, it isn’t good budget management and Australian families are paying a high price for it,” Mr Taylor said.

“Inflation comes from Canberra and Australians are looking for a government that will manage its budget to take pressure off theirs.”

Opposition finance spokeswoman Jane Hume said the budget “must provide a plan to address the cost of living crisis and that it must be a plan with real fiscal restraint”.

“The government needs to manage its spending. Spending is easy and we have seen no fiscal discipline from Labor. If Labor delivers another big spending budget, it will be like having one foot on the accelerator while the Reserve Bank is putting its foot on the brake,” Senator Hume said.