Labor’s costing document is confirmation of a massive ‘black hole’ in their costings, Shadow Treasurer Rob Lucas said today.
“Labor’s total spending promises amount to $1.3 billion, yet their supposed ‘savings’ next year are only $93m rising to $96m in 2009-10,” Mr Lucas said.
“It is now obvious Mr Rann and Mr Foley will have to increase taxes and charges to pay for their $1.3 billion promises.
“Labor denials about increased taxes and charges cannot be believed because they have ‘form’ on this issue. They broke all their election promises last time with the Rann Water Tax and increased stamp duty and gaming taxes, with Mr Foley boasting:
“You do not have the moral fibre to go back on your promise. I have…”
Kevin Foley, Hansard, 15 July 2002
“It is also interesting to note that Labor this morning on ABC Radio refused to guarantee there will not be any Targeted Voluntary Separation Packages (TVSPs) if Labor is elected. Labor’s hypocrisy on this issue is stunning.”
Attached to this release is the confirmation of the costing policy announced on the first full day of the election campaign by the Liberal Party.
The attached Liberal document confirms total annual savings of about $330m commencing from 2007-08. It also confirms that for each of the budget forward estimate years 2006-07, 2007-08, 2008-09 and 2009-10 the savings are greater than the proposed expenditure.
Therefore, all Liberal promises are costed and fully funded by the savings outlined on the first day of the campaign.
The Liberal document has been reviewed by respected independent Chartered Accountant Mr Allan Burchard (see Notes below), who has conducted his review ‘in accordance with Australian Auditing Standards applicable to review engagements’.
Mr Burchard’s review concludes:
“Subject to the above matters, nothing has come to my attention during the course of my review to suggest that the policy costings, funding proposals and forecasts of total net savings contained in your documents are unreasonable.”
“The big difference between Liberal and Labor on this critical issue is the Liberal Party were honest and accountable from Day One in revealing how they would pay for their promises with approximately $300m a year in savings,” Mr Lucas said.
“On the other hand, Labor has twisted and turned for four weeks, refusing to reveal any details of their costing proposals.”
1. Mr Allan Burchard is an independent Chartered Accountant who was an Audit Partner for one of the major international accounting firms in Adelaide for many years with several years’ international experience.
Mr Burchard is currently undertaking consultancy work for a range of private and public sector clients including PIRSA (state government department Primary Industries and Resources South Australia).
2. Liberal costing detail announced on 21 February 2006:
• Cutting two Labor Ministers, white cars and other costs.
• Cutting 76 Labor spin doctors and other Ministerial staff.
• Cutting 4,000 public servants out of Labor’s increase of 8,000-9,000 and there will be no forced redundancies.
• Cutting the Thinkers in Residence program.
• Cutting Government advertising, consultants, contractors.
• Stopping the $51 million tramline extension.
• Achieving a 1 per cent efficiency dividend on non-salary operating expenses.
3. Costs of TVSPs in 2005-06 amount to $105m.
4. Kevin Foley’s budgets have consistently underestimated revenue by an average of $640 million per annum. In addition, the Treasurer maintains contingency provisions to allow for urgent and unexpected expenditure requirements over the budget and forward years. However, the Government has not revealed the extent of these contingency provisions.
This funding has not been utilised by the Liberal Party in the attached funding and costing schedule. Most of this additional funding will be available to fund any cost increases or new initiatives in future years.