Labor spending on election promises hits $111bn

Labor spending on promises and other programs has soared above $100bn, Coalition analysis says, blaming the government for ‘higher inflation and increasing mortgage costs’.

Finance Minister Katy Gallagher rejected the attack on Labor’s marquee policies. Picture: Martin Ollman

Anthony Albanese’s spending on election promises and other key programs has soared above $100bn, Coalition analysis says in blaming Labor for “driving higher inflation and increasing mortgage costs around Australia”.

Ahead of the May 9 federal budget, NSW Liberal senator Andrew Bragg said legislation passed or presented to parliament showed “$111.4bn is being splurged by Labor through budget and off-budget spending”.

Finance Minister Katy Gallagher rejected the attack on Labor’s marquee policies, including the $15bn National Reconstruction Fund, $10bn Housing Australia Future Fund and Powering Australia climate change programs.

Andrew Bragg

Senator Gallagher said “it’s comical to receive lectures from Senator Bragg, who was a member of a government known only for its rorts, waste and economic mismanagement”.

“One of the reasons we have high inflation right now is because of the former government’s chronic under-investment in critical areas of the economy – like energy, housing and our industrial base,” Senator Gallagher told The Australian.

Senator Bragg, who is chair and deputy chair of the parliamentary economics references committee and economics legislation committee, said “$84.9bn is being spent through the usual budget processes and another $26.5bn is being put into off-­budget funds”.

“The $84.9bn cost is spread over the period from 2021-22 to 2026-27. (The) $111.4bn represents over 4 per cent of Australia’s annual GDP as at 2021-22,” he told The Australian.

“Some of the biggest items include the reconstruction slush fund, housing slush fund and the energy package.

“Labor has shown no fiscal restraint and shown after almost 12 months that it does not have the guts to tackle inflation. The new expenditure shows the Labor Party is putting upward pressure on interest rates and increasing the cost-of-living pressure for families and small businesses.”

In the October budget, the government found $22bn in savings, delivered a cumulative improvement in the bottom line of more than $40bn and lowered debt to GDP in each year of forward estimates compared with the Morrison government’s final budget.

Senator Gallagher said “investing in the supply side of our economy is part of the solution to the inflation challenge, not the problem”.

“The Albanese government’s investment funds … will deliver investments needed to lift the speed limit on the economy,” she said. “The projects will be rolled out in a responsible way over a number of years, with the majority of investments occurring beyond the next two years when inflationary pressures are most severe.”

Senator Gallagher on Sunday confirmed the government was assessing the adequacy of the ­single parenting payment, which ceases when a youngest child turns eight.

The Finance Minister said the government was looking at the parenting payment and commonwealth rent assistance, which were among six Women’s Economic Equality Taskforce recommendations.

As the expenditure review committee of cabinet puts the finishing touches on the budget, Senator Gallagher said “we are looking at savings all the time” and attacked the Coalition for leaving behind “terminating measures” that must be funded.

“It’s not just savings to return to budget, it’s actually finding those savings that can be reprioritised into areas of new need. That’s part of the challenge as well. We’ve inherited a budget that’s under a lot of stress, we’ve got a lot of booby traps,” she said.

“A reasonable part of the budget is actually addressing these terminating measures, which is essentially the dishonesty of the previous government about the state the budget was in.”