Coalition would have $9bn deficit: Labor
http://news.smh.com.au/breaking-news-national/coalition-would-have-9bn-defici...
With the federal budget just seven weeks away, Labor has ramped up its assault on the coalition's policy commitments, saying the opposition would plunge Australia into the red if it was in government.
Finance Minister Penny Wong released a 12-page party document that crunches the numbers on known coalition spending and cutback promises, including Opposition Leader Tony Abbott's commitment to scrap the mining and carbon taxes.
It calculates the opposition's policies would negatively impact government finances by $10.5 billion and leave the 2012/13 budget with a $9 billion deficit.
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Scrapping the carbon tax would cost $3.2 billion and repealing the mining tax would put a $2 billion dent in federal coffers, the document says.
Senator Wong said Labor had done the costings so Australians would know what Mr Abbott would do to the budget, which the government plans to return to surplus next financial year.
She challenged the coalition to "come clean" on the $70 billion worth of savings it says it has identified and tell the government how its estimates are wrong.
"If they are making cuts of that magnitude Australians are entitled to know what they are," she said.
Coalition treasury spokesman Joe Hockey said Senator Wong's calculations were wrong and recommitted the coalition to removing government duplication to generate savings.
"Previously she's been claiming we have a $70 billion funding shortfall, which is wrong," Mr Hockey told Network Ten.
"Now she says it's a $9 billion funding shortfall."
Mr Hockey said that as finance minister Ms Wong was responsible for a deterioration in the 2011/12 federal budget deficit from $12 billion to $37 billion in the past 12 months.
"So quite frankly we're not going to take any lectures on numbers or on fiscal prudence from Penny Wong."
Labor wants to deliver a $1.5 billion surplus in 2012/13, after an expected $37 billion deficit this financial year.
Opposition finance spokesman Andrew Robb said Ms Wong's figures were "shonky analysis".
Mr Hockey declined to run through the budget savings identified by the coalition but said certain government departments, like the Department of Climate Change and the Department of Environment, would be merged and staff levels reduced.
"We've said we are going to merge the departments, reduce the number of staff," he said.
"We stand by that and you'll see all of our savings initiatives before the next election."
Earlier this month, Mr Abbott said his government would commission an audit to review commonwealth public service operations, and singled out the departments of health, education and defence materiel as examples of areas where staff numbers could be reduced.
Mr Hockey said on Sunday that under a coalition government, overall tax rates would be lower and cuts for big business would be modest, although he did not name a figure.
Mr Abbott last week declined to recommit to a 2010 election promise to cut corporate tax by 1.5 per cent.
The coalition has vowed to oppose the government's mining tax, which is likely to be passed this week by the Senate, and any other legislation linked to it, including business tax cuts.
Ms Wong said businesses faced higher taxes under Mr Abbott, while the Labor government wanted to reduced business tax by one per cent.
Mr Hockey said the coalition did not know what kind of an economy it would inherit from Labor.
"We don't know what the state of the budget will be ... until just before the election and that's the time when we will finalise all of our numbers and give you all the details on our plans for Australia," he said.
The 2012/13 federal budget will be handed down on May 8.
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