Hockey Unveils A$31.6 Billion in Budget Savings Ahead of Ballot

Australia’s opposition coalition, leading in opinion polls before the Sept. 7 election, said it would make A$31.6 billion ($28.3 billion) of budget savings over four years as it trims the civil service and cuts business compensation linked to the carbon tax.

“All coalition policies are fully costed and fully funded,” Shadow Treasurer Joe Hockey said in an e-mailed statement today. “Only the coalition can be trusted to get the budget back under control.”

A Liberal-National government would save A$5.2 billion by cutting 12,000 public servants, and A$7.5 billion by scrapping compensation and other spending associated with the government’s carbon price mechanism, Hockey said. Eradicating spending linked to the government’s 30 percent tax on coal and iron ore profits would save A$4.7 billion, he said.

Opposition leader Tony Abbott and Labor Prime Minister Kevin Rudd have put management of the economy at the center of the election campaign amid a slowdown as the China-led mining investment boom wanes. The ability of the major parties to deliver pre-election sweeteners has been constrained by falling government revenue, with Treasury predicting a budget deficit of A$30.1 billion for the 12 months through June 2014.

Hockey said the A$9.8 billion outlay for the coalition’s proposed Paid Parental Paid Leave Scheme would be more than covered by scrapping existing government policies in that area, and by a 1.5 percent levy on company taxable income above A$5 million.

Surplus Pledge

The coalition, which is pledging to produce a budget surplus equal to 1 percent of gross domestic product within a decade, only needs to gain four more seats in the 150-seat lower house to form government. The coalition is leading Labor by six percentage points on a two-party preferred basis, according to a Newspoll published in the Australian newspaper Aug. 26.

Abbott and Rudd, both aged 55, will take part in a televised debate -- the last of three in the election campaign - - in Sydney later today.

“Abbott has a dog of a policy and it’s called paid parental leave,” Rudd told reporters in Brisbane today. “People don’t like leaders who arrogantly think they have the election in the bag and try to avoid scrutiny.”

The coalition’s two-party preferred vote fell 1 percentage point from the week before to 53 percent, according to Newspoll. Labor rose 1 point to 47 percent. The measure is designed to gauge who is most likely to form a government under Australia’s preferential voting system.

To contact the reporter on this story: Jason Scott in Canberra at jscott14@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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