Labor launches costings broadside from budget back foot
Finance Minister Jim Chalmers launched a political campaign against the coalition, accusing it of planning a half-trillion-dollar hit to the budget.
Labor has found itself under increasing pressure in recent weeks over its decision to roll back tax concessions for property, shares and trust investments.
But the costs revealed by Dr Chalmers show that repealing the changes, as the coalition has promised, would cost the federal budget tens of billions of dollars in lost revenue.
According to the analysis, the opposition’s policies will cost a total of $544.4 billion over the next nine years.
This includes $212 billion in lost revenue from indexation of income taxes, $43.1 billion from the repeal of CGT and negative regulation reforms, $44.2 billion from the removal of the new tax on trusts, $93.5 billion from increased defense spending and $50 billion from reducing Australia’s immigration intake.
While the coalition will make some savings by scrapping several measures, including a tax cut on electric vehicles and a significant housing fund, the government’s figures show it will come nowhere close to offsetting the extra spending.
“This is a multi-billion dollar debt bomb that the coalition will drop on future generations of Australians,” Dr Chalmers said in a statement.
“His costless policies will lead to much larger deficits, higher debts and higher inflation.”
Some of the figures Labor relies on for costing are based on commitments made in 2022. The government says this makes its estimates somewhat conservative.
Shadow treasurer Tim Wilson has rejected claims the government is planning to swamp Australians with billions of dollars in higher taxes.
“Jim Chalmers and Anthony Albanese have admitted they hit us with $273 billion in taxes that Australians didn’t vote for,” he said.
Mr Wilson’s figure is based on Labor’s refusal to back the coalition’s plan to index income tax brackets in line with inflation, as well as the government’s planned changes to negative gearing and capital gains tax.
Parliament resumes three sittings on Tuesday and debates over tax reforms are expected to take center stage as the government tries to pass legislation before the long winter break.
The coalition is threatening to cut support for separate legislation to tighten eligibility for the National Disability Insurance Scheme if Labor tries to pass tax changes with Greens support, paving the way for complex negotiations in the coming days.
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