11/05/2007
Finance Minister Nick Minchin’s claims today regarding
Labor’s
savings proposals are wrong in every respect.
• Withdrawal from the European Bank of Reconstruction and Development
saves $88 million on the capital side of the Budget, available for alternative
investment. When Senator Minchin puts out his claimed list of Labor’s
spending commitments he includes capital items, some completely fictitious.
Yet when it comes to Labor’s savings, the distinction between recurrent
spending and capital magically reappears.
• No provision for interest savings from the Medibank Private sale appeared
in the previous Budget. The projected saving of $12 million will soon be redundant
because it related to expenditure in 2006-07 only.
• The welfare compliance program referred to by Senator Minchin was not
funded right across the forward estimates as he claims. It has now been replaced
by other equivalent compliance measures.
• The rollover of Budget years produces pluses and minuses in Labor’s
savings plan, as 2006-07 disappears and 2010-11 enters the forward estimates.
The overall effect is mildly positive.
The most telling point in Senator Minchin’s release is the reference
to earlier comments by Labor Shadow Ministers supporting spending Labor proposes
to cut. This speaks volumes for his abject weakness as Finance Minister. He
might be happy to cede a veto to his colleagues over spending cuts. I’m
certainly not. No wonder there are no serious savings in the 2007 Budget, and
spending is projected to increase from 21.3 per cent of GDP in 2005-06 to 21.8
per cent in 2010-11.
Just as significant are the Labor savings initiatives Senator Minchin doesn’t
mention. With spending on Government advertising and consultants more than
double the highest level recorded under Labor in real terms, that’s
hardly surprising.
11 May 2007
