Source : the age
The Coalition will pledge to slash at least $10 billion out of budget deficits over the next four years while bringing down government debt by $40 billion amid suggestions the cost of its signature nuclear power policy will be far more expensive than it has promised.
Shadow treasurer Angus Taylor and finance spokeswoman Jane Hume will on Thursday reveal the Coalition’s full costings, which will confirm cuts to several high-profile Labor programs, including its pledge to wipe $16 billion in student debts.
Angus Taylor and Jane Hume will release the Coalition’s election costings, which are expected to show a $40 billion reduction in gross government debt.Credit: Dominic Lorrimer
But even with its promises, both the Coalition and government will go to voters on Saturday with the budget facing deficits over the rest of the decade and gross debt soaring through the $1 trillion mark.
This week, ratings’ agency S&P Global warned Australia’s AAA credit rating could be put at risk if either of the major parties’ election promises resulted in larger structural deficits and more debt than expected.
On Monday, Treasurer Jim Chalmers and Finance Minister Katy Gallagher released the government’s own costings, which showed total budget deficits would be $1.1 billion lower than forecast in the March 25 budget.
Despite the modest improvement, the budget would show cumulative deficits of $150 billion over the next four years.
Taylor and Hume will outline cuts that will bring down the cumulative deficits by a double-digit level, with one of the biggest savings expected to come from axing up to 41,000 public servants based in Canberra. They will be reduced through natural attrition over the next five years.
It will scrap the government’s $14 billion Made in Australia production tax credits for the mining and green hydrogen sector.
The write-off of student debt, affecting both tertiary and vocational education students that the government estimates saves affected people about $5000, is due to start from June 1. But the Coalition would not go ahead with the proposal.
Taylor accused the government of squandering hundreds of billions of dollars’ worth of extra revenue over the past three years.
“After raking in almost $400 billion in extra revenue, Labor chose to splurge instead of save, leaving Australians more exposed to the next economic shock,” he said.
“We will rebuild the nation’s fiscal buffers, reduce debt and begin budget repair because that’s what economic responsibility looks like.”
Gross government debt, currently $926 billion, is expected to go through $1 trillion in the coming financial year before reaching $1.2 trillion in 2028-29. In that year, the interest on the debt is expected to reach $38.2 billion.
Taylor and Hume will promise to bring gross debt down by $40 billion. That will be partly achieved by axing the government’s Rewiring the Nation Fund and stopping the $10 billion Housing Australia Future Fund.
Opposition Leader Peter Dutton has visited more than a dozen petrol stations during the election campaign to focus on the Coalition’s plan to cut fuel excise for one year.Credit: James Brickwood
The Coalition’s costings will have to include the impact of its 25¢-a-litre cut in fuel excise for the next 12 months, worth $6 billion, and its one-off $1200 tax offset to low- and middle-income earners that is estimated to cost $10 billion.
Chalmers accused the Coalition of being sneaky by holding back its costings, including key details about its nuclear policy, until the second-last day of the campaign. Chalmers did not release Labor’s 2022 election costings until the Thursday before polling day.
He said there were already black holes around the Coalition’s mortgage interest deductibility, petrol excise and small-business fringe benefits tax reduction policies while it would attempt to use heroic assumptions around productivity growth to make its numbers add up.
“They want to skate through all the way to the election, or as close as possible, without coming clean. I think that speaks volumes about the approach that they’re taking,” Chalmers said.
A key issue remains the Coalition’s nuclear policy. Peter Dutton has slammed as a lie the government’s claim that it will cost $600 billion, arguing CSIRO research shows it would cost $116 billion to deliver its planned five large-scale and two small modular reactors at seven sites across the country.
The $116 billion figure is based on construction costs for a specific type of reactor – Westinghouse’s AP1000, which is one of the most common and cheapest designs in use around the world.
Coalition energy spokesman Ted O’Brien and Nationals Leader David Littleproud have promised not to use the AP1000 if it would reduce irrigation water to local farmers.
The AP1000 requires significant amounts of water to cool its reactor.
Former Land and Water Australia chief executive Andrew Campbell found there is not enough water at least five of the seven sites nominated by the Coalition for nuclear reactors, in his recent report commissioned by the Liberals Against Nuclear lobby group.
Littleproud and O’Brien have separately raised the prospect of building what are known as dry cool reactors.
However, according to the World Nuclear Association, they cost up to four times more than a typical water-cooled reactor such as the AP1000.
Dry cooled reactors, which use air rather than water to dissipate heat from the plant’s core, are not in commercial use at large-scale nuclear plants.
Dutton confirmed on Wednesday that the Coalition had not finalised which reactors would be used.
“We will take advice from the experts on what is the best fit for those seven sites,” he said.
Littleproud told the National Press Club on April 24 that he had promised to farmers “there is nothing extra coming out of the consumptive pool” of water available to irrigators, and models would be selected based on their water consumption.
“There are other technologies in terms of dry cooling,” he said.
O’Brien in February said, “the nuclear technology for Australia is yet to be selected”.
“Modern nuclear plants have different cooling systems, including wet systems which use water, dry systems which don’t use water, along with other emerging designs which use other innovative systems,” he said.
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