Labor costs to contain larger debt and deficit
“Everything we invest in is aimed at increasing productivity,” he said.
“We understand the need for fiscally responsible policy, which is why our investments are aimed at boosting productivity.”
He said Labor’s flagship policy, a $5.4 billion increase in childcare subsidies, would return $2 to the economy for every $1 invested.
Ahead of the election, Labor has pledged around $16 billion in major policy measures, ranging from $200 million for road improvements to $2.5 billion to help fix aged care, $5.4 billion each for child care.
Based on statements made by MPs and shadow ministers, the government estimates that around $5 billion more has been pledged in the form of hundreds of small grants.
That’s a total of about $21 billion in additional spending pledges.
Labor also agreed to pass almost every government policy, such as extending the Commonwealth Elderly Health Card and freezing prepayment rates for pensioners, while outbidding the government to cut the price medicines under the Pharmaceutical Benefits Scheme.
The only savings promised by Labor are $5 billion over five years through a reduction in the use of consultants and additional measures to end tax avoidance by multinationals.
Mr Albanese noted on Monday that Labor would also ask the Treasury and Finance to carry out an audit to rid the budget of waste and errors, with the aim of funding further savings.
He also admitted that not all of the dollars spent on labor, like the hundreds of community grants, were based on productivity.
“Pledges to improve people’s quality of life are also things that happen during election campaigns,” he said when asked about pledges to fund facilities such as parks. from BMX, murals and dog parks.
None of Labor’s listed spending includes the $52 billion in various off-budget funds that will be used in various ways to boost sovereign manufacturing, improve NBN, rebuild the East Coast electricity transmission system and build thousands of low-cost homes.
Only interest paid on accumulated debt to pay cash or fund assets appears on the bottom line.
The bulk of Labor’s productivity dividend will come from these funds. On Tuesday, Mr. Albanese will announce that $1.5 billion from the $15 billion national reconstruction fund will be earmarked for a new medical manufacturing fund to catalyze domestic manufacturing of drugs, vaccines and other lifesaving medical products,
“Serious countries should do things. Serious countries should be run by builders, not bulldozers, this is how I would lead a future Labor government,” Mr Albanese said.
The Coalition’s spending pledges were costed and included in the March 29 budget. This projected a budget deficit of $79.8 billion for this fiscal year and a cumulative deficit of $224.7 billion over the next four years.
Its costs to be released on Tuesday will show no real difference with this net result showing a $1 billion improvement over forecast estimates.
This objective was achieved through the Public Service Efficiency Dividend.
Treasurer Josh Frydenberg said the ball was now in Labor’s court.
“The reality is that Labor hasn’t come up with its costing policy because we know it can’t handle the money,” he said.
“It’s simple, the costs of our policies are publicly available, but Labor’s are not.”
Labor has been preparing for a higher projected debt and deficit since November last year when Shadow Treasurer Jim Chalmers gave a speech saying his priority would be quality of spending over quantity, or “value for money”. -price”.
He repeated it in a keynote speech in March, saying that given the level of debt and deficit running up before and during the pandemic, Labor would no longer be lectured by the government on fiscal correctness.
“I think the country is ready for a different debate about budgets and how we measure progress,” he said.
“And that the days of our political opponents preaching to each other about fiscal responsibility are well and truly over.
“No government since the war has gone to elections with a worse budget record.
“We ask to be judged on the quality of our investments, not just the quantity of expenditures.”
Such a move would be a break with orthodoxy where the oppositions have sought to be seen as economically prudent, if not more so, than the government.
In the run up to the 2019 election, the Labor Party, through its sweeping tax and spending programme, promised to return to surplus at the same time as the Coalition, but to run a surplus twice as large.