Daily BulletinDaily Bulletin

The Conversation

  • Written by Jenni Henderson, Assistant Editor, Business and Economy, The Conversation

The Coalition is finding additional savings of A$2.3 billion by cracking down on welfare in its policy costings, just days from the federal election. It noted $1.2 billion spent on promises made during the campaign and reiterated the $1.1 billion improvement in the deficit since the budget, previously outlined in the Pre-Election Economic and Fiscal Outlook (PEFO).

Economist Saul Eslake on the Coalition policy costings. The Conversation5.97 MB (download)

But governments can’t ever eliminate the budget deficit entirely by clamping down on welfare, as it’s one of the largest and fastest growing areas of government expenditure, says Saul Eslake, economist and Vice Chancellor’s Fellow at the University of Tasmania.

“It’s very rare that you ever get to find out whether the savings produced either in lower welfare benefits or higher tax collections match the claims that are made for these measures…or whether they exceed the costs of implementing the so-called crackdowns,” he says.

Finding savings in the spectre of “welfare cheats” or “tax avoiders” is something both Labor and the Coalition have used during the campaign.

In announcing the costings the Coalition has sought the mantle of better economic managers, with Treasurer Scott Morrison comparing it’s $1.1 billion improvement in the deficit to Labor’s increase of $16.4 billion over four years.

However Eslake says the deficit isn’t always a sign of bad economic management depending partly on the circumstances in which deficits are incurred and partly on purpose of government borrowing.

Ratings agency Moody’s issued a warning before the election campaign that government must raise taxes as well as cut spending to reduce the budget deficit.

The risk to Australia’s AAA credit rating is real and could have implications for the borrowing costs of Australia’s major banks, whose credit rating is underpinned by the government’s, Eslake says.

“There is a somewhat greater chance that Australia could lose its triple a credit rating under Labor government than under a coalition.”

“Although I don’t want to overstate the margin between the Coalition’s bottom line and Labor’s, it is nonetheless surprising that Labor has been willing to contemplate bigger deficits of this order of magnitude,” he adds.

He also says that voters will be sceptical of Labor’s claim that it will run bigger budget surpluses in the forward estimates before returning to surplus in 2020, because of the unreliable nature of forecasting.

Authors: Jenni Henderson, Assistant Editor, Business and Economy, The Conversation

Read more http://theconversation.com/coalition-targets-welfare-in-2-3b-pre-election-savings-pitch-61747

Vital Signs: Shorter meetings but longer days – how COVID-19 has changed the way we work

arrow_forward

The Conversation
INTERWEBS DIGITAL AGENCY

Politics

Did BLM Really Change the US Police Work?

The Black Lives Matter (BLM) movement has proven that the power of the state rests in the hands of the people it governs. Following the death of 46-year-old black American George Floyd in a case of ...

a Guest Writer - avatar a Guest Writer

Scott Morrison: the right man at the right time

Australia is not at war with another nation or ideology in August 2020 but the nation is in conflict. There are serious threats from China and there are many challenges flowing from the pandemic tha...

Greg Rogers - avatar Greg Rogers

Prime Minister National Cabinet Statement

The National Cabinet met today to discuss Australia’s COVID-19 response, the Victoria outbreak, easing restrictions, helping Australians prepare to go back to work in a COVID-safe environment an...

Scott Morrison - avatar Scott Morrison

Business News

Reinventing The Outside Of Your Office

Efficient work is a priority in most offices. You need a comfortable interior that is functional too. The exterior also affects morale. Big companies have an amazing exterior like university ca...

News Company - avatar News Company

Kaspersky and Ferrari partnership: tailoring cybersecurity for an iconic brand

Kaspersky is commemorating the 10 year anniversary of its strategic partnership with iconic, global brand - Ferrari. The cybersecurity company is a sponsor of the brand’s Formula One racing team...

News Company - avatar News Company

Instant Steel Solutions Review

Are you keen on having the right guidance, knowledge and information about the right kind of steel purchases for your industries? If yes, then you are in the right place. There is no doubt that ...

a Guest Writer - avatar a Guest Writer



News Company Media Core

Content & Technology Connecting Global Audiences

More Information - Less Opinion