Hockey Unveils A$31.6 Billion in Budget Savings Before Poll

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.

Parental Leave

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.

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 a 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.

“Tony, why don’t you tonight release the details of the 200 policies your shadow treasurer said today have been fully costed and produce your budget bottom line now,” Rudd told Abbott in a televised debate in Sydney today -- the last of three in the election campaign. “Otherwise, people will fear that you are being evasive about this question.”

Government Spending

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.

“Government, like families, like businesses, has got to live within its means,” Abbott said in the debate. “Unfortunately over the last six years we haven’t been.”

Abbott reiterated his coalition’s policy that the threshold for scrutinizing proposed overseas purchases of agricultural land should be set at A$15 million, down from A$244 million now. Asked whether Chinese ownership was a particular concern, he said there shouldn’t be a “color bar” on foreign ownership.

Rudd responded by saying Australia needed to take a more cautious approach to foreign ownership of rural land, and it shouldn’t be “open slather.”

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