Election 2022: Labor quizzed on mounting policy costs

Labor faces a potential $1.6bn blackhole in key planks of its agenda, including a $500m bid to host a climate summit in 2024.

Labor leader Anthony Albanese with Chris Bowen, left, on Thursday. Picture: Liam Kidston

Labor is facing a potential $1.6bn blackhole in key planks of its ­economic policy agenda including an estimated $500m cost for its bid to host an international climate summit in 2024.

Anthony Albanese is also facing questions on how Labor would fund $1.4bn in additional Coalition election pledges the Opposition Leader has promised to match so far during the election campaign.

A Coalition analysis of Labor’s powering-the-nation plan, which Chris Bowen has claimed was a central pillar of Labor’s economic agenda, shows a direct cost blowout to the budget of an extra $772m due to an absence of a funding ­envelope in its modelling for three key policies.

This includes a $561m bill for plans to host the COP29 climate summit in two years’ time, based on the inflated cost of the comparable G20 global leaders’ summit held in Brisbane in 2014.

Labor has so far failed to include the cost of this in its policy modelling, despite claiming it was fully costed. It has said it would provide all its policies for costing scrutiny prior to the election.

The independent modelling which Labor has relied on for its policy documents $668m in seven key policies areas with a direct cost to the budget. A $20bn rewiring of the grid policy is to be funded through borrowings.

The direct budget costs did not include a funding figure for achieving a net-zero emissions policy for the public service, which the Coalition claims would cost a further $191m.

The unfunded cost of restoring the National Climate Change Authority is also estimated to add another $20m over four years.

The Coalition claims that Labor has also underestimated the cost of its manufacturing and skills policy by $880m.

Labor has promised 465,000 free TAFE places, 20,000 new university places and a $50m TAFE technology fund all for the bargain basement price of $1.2bn.

This implies a cost of just $1335 per TAFE place despite the government’s similar JobTrainer program costing $2194 per place.

The Coalition claims that the 20,000 extra university places were also significantly underfunded at a cost of $24,100 per place. This is despite the current commonwealth government subsidy for a three-year teaching degree costing taxpayers more than $40,000, or a three-year nursing degree costing more than $50,000.

A spokesperson for Labor said: “All of Labor’s policies are fully costed and we will release details in the usual way at the usual time before the election.”

But the Coalition’s campaign spokesman and Finance Minister Simon Birmingham said Mr Albanese needed to reveal the details that sat behind their policies.

“These supposedly signature policies have been either significantly underfunded or were never designed to deliver the scale of the reforms Labor is promising,” Senator Birmingham said.

“On skills, the Morrison government is delivering free and ­subsidised Certificate IIIs and diplomas to meet workforce shortages and future skills needs, but on Mr Albanese’s numbers he seems to be planning little more than a resume-writing and basket-weaving revolution.

“Mr Albanese seems to think that expanding the number of public servants who think about the climate, hosting a major international event like COP29 and making the public service net zero by 2030 will all be free.”

The Australian can reveal Mr Albanese’s decision to match six Coalition election promises during the campaign will add $1.4bn to Labor’s costings. These include expanding eligibility for the seniors’ health card ($70m), widening subsidies for continuous glucose monitoring ($273m), a Cairns water security project ($107m), a South Australian cancer centre ($77m) and getting more doctors into the regions ($146m).

Labor’s decision to match and beat the government’s plan to reduce drug prices by $12.50 carries a $698m price tag. This compares to the Coalition’s $558m promise to slash prices by $10.

Anthony Albanese thumbs though a folder after faltering when questioned on Labor's NDIS policies during a press conference. Picture: Sky News

The economic and budget strategy released by Jim Chalmers last week outlined only two savings measures over four years – a $1.89bn multinational tax crackdown and a $3bn clean-out of contractors and consultants. Labor’s $5bn in savings will not cover the $5.4bn cost of its first-phase childcare plan, which will increase subsidy thresholds from July next year. The Coalition says Mr Albanese’s uncoated plan to implement a “universal 90 per cent subsidy for all families” will cost $63bn over 10 years.

If Mr Albanese wins the election, Labor will reinvest in the Australian Public Service, commencing with a phase one $500m recruitment drive of 1080 new bureaucrats.

Many of Labor’s biggest election commitments, including the $20bn Rewiring the Nation Corporation and $15bn National ­Reconstruction Fund, are off-budget.

Mr Bowen, the opposition’s climate change spokesman, on Thursday repeated Labor’s pledge to host the UN COP29 2024 summit in Australia.

“I’ll tell you what would be an even better trade exhibition – a Conference of the Parties meeting, a COP meeting here in Australia, which an Albanese Labor government will bid to host here in Australia,” Mr Bowen said.

“To send the message to the world that Australia is under new management when it comes to climate, but also to sell Australia’s economic opportunities as a renewable energy powerhouse.

“That’s a key part of our bid to host the Conference of the Parties with our Pacific Island neighbours if they choose to do so.”

The Opposition Leader said Labor’s Powering Australia climate change plan would “create 604,000 new jobs by 2030 (and) reduce emissions by 43 per cent”.