Economist Saul Eslake predicts Coalition faces $30 billion budget shortfall

Updated

The Opposition has rejected an independent analysis of its federal election costings, saying it contains "some pretty fundamental errors in the calculations".

Bank of America Merrill Lynch chief economist Saul Eslake analysed the Coalition's spending commitments and its budget cuts.

He says the Coalition needs to find another $30 billion in savings to make good on its promise to improve the budget bottom line.

Mr Eslake says he excluded Tony Abbott's paid parental leave (PPL) policy from his calculations, given the assurances it is budget neutral.

But he says there is still a significant gap between new spending promises and the savings that have already been announced.

"It's a large figure. It's a lot less than the $70 billion which the Government is claiming, but it's still a very significant figure," he said.

"I'm not suggesting the Coalition won't come up with a figure like that, but it will be a very big figure."

But the Coalition's campaign spokesman, Mathias Cormann, says Mr Eslake has got his sums wrong.

He says the economist has not properly calculated the savings the Coalition would make by delaying the superannuation guarantee and not increasing the refugee intake.

"He doesn't have access to the numbers and the sums we have been working through with the Parliamentary Budget Office (PBO)," he told ABC News 24.

"The Parliamentary Budget Office are aware of the all the detail in our policies but have access to relevant Treasury data, which Mr Eslake doesn't.

"There are some pretty fundamental errors in the calculations that he has made."

But Labor has seized on Mr Eslake's analysis, saying there would be savage cuts under a Coalition government in order to pay for its promises.

Labor says Coalition has 'very substantial black hole to fill'

Treasurer Chris Bowen said if the Coalition believes Mr Eslake's analysis is wrong, they must release their costings for voters to see for themselves.

"We believe their black hole is $70 billion and the cuts they'd need to provide are $70 billion," he said.

"But even if it's $30 billion, that is a very substantial black hole for them to fill.

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"If Mr Abbott and Mr Hockey say that figure's wrong, if they're saying Mr Eslake is wrong - well show us your figures.

"Put in your costings, release your alternative budget to the Australian people and do so today."

Earlier, Senator Cormann said Mr Eslake's figures actually undermine the Government's claim of a $70 billion hole in the Opposition's costings.

He says it should put an end to Labor's scare campaign.

"The $70 billion figure has been exposed as a Labor lie again and again," he said.

Mr Bowen said Labor stands by the $70 billion calculation.

"It was Mr Hockey who first said it was $70 billion. We've got analysis to show that it's $70 billion," he said.

"But even if it's $30 billion it is a massive shortfall which would need to be made up for cuts to basic services, to hospitals, to schools.

"There is no way of easily fixing a $30 billion black hole or a $70 billion black hole."

The ABC's Fact Check has said the $70 billion figures is not credible.

It says the total includes outdated spending plans and outdated revenue reductions.

Opposition plans to release costings in final week of campaign

This morning the Opposition's communications spokesman Malcolm Turnbull indicated the Coalition would release its costings at the start of the final week of the campaign.

"Joe (Hockey) will do it and he will do it in that last week, and I expect early in that last week," he told Channel 9.

At the weekend the Coalition revealed it had recruited three respected economists to oversee its policy costings and verify its figures are correct.

The Opposition has been working closely with former Treasury official Geoff Carmody, ex-Queensland auditor-general Len Scanlan and a former head of the Prime Minister and Cabinet, Peter Shergold.

Senator Cormann says the Coalition has applied "very rigorous processes" to its policy commitments.

"What we will continue to do is work with the Parliamentary Budget Office, which has got access to all of the the relevant data and we have also appointed an independent panel of experts," he said.

"[They] are providing independent verification both of the processes we have follow and the costings we have identified.

"In good time before the election we will deliver a full list of all our policies and the cost, a full list of all of our savings and their value.

"What people across Australia will be able to see is that the budget bottom line will be better off under the Coalition than Labor, and that they can have absolute confidence in the integrity and the credibility of our processes."

Topics: federal-elections, government-and-politics, federal-government, elections, liberals, australia

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