The Coalition has today released its second tranche of pre-election costings (table here), which follows the $31 billion of savings announced previously. According to the document, the Coalition would achieve an additional $9 billion of savings, half of which would come from reducing the foreign aid budget. From the AFR:
“Together with modest adjustments for interest saved on reduced debt, these bring total savings announced by the Coalition to $42 billion in fiscal terms,” Hockey and Robb said in a statement.
“As a result, on an underlying cash basis, the budget impact of the Coalition’s policies is to improve the budget bottom line by $6 billion and reduce government debt by $16 billion.
Hockey says the figures put paid to Labor’s claims of a $70 billion black hole and prove there will be an increase in pension payments along with spending on health and education under a Coalition government.
Hockey has reaffirmed a 1.5 per cent cut company tax to 28.5 per cent and confirms the Coalition would not follow through with $1.8 billion in changes to the fringe benefit tax.
I’ll admit that I am not that interested in the debate around costings (although the large cut to the foreign aid budget seems heartless). What is far more important is the quality of spending and whether it is likely to benefit the economy and society. In my view, the accounting view of policy that has dominated this election campaign has been a red herring obstructing debate on more important issues.
Let’s hope the Productivity Commission receives an expanded role under the new government in order to restore focus on good policy design over political expediency.
