Federal election 2019: Labor's cuts to tax concessions to save $154b over a decade, policy costings show

Updated

Federal Labor's policy costings have outlined $154 billion in savings to the budget over a decade, due to its contentious tax changes.

Key points: The ABC understands Labor's costings will show it intends to match the Coalition's surplus this coming financial year

Shadow Treasurer Chris Bowen said the party would achieve a surplus of one per cent of GDP by 2022-23

That would be four years earlier than the current Government trajectory, he said

The Opposition's plans to curb negative gearing, capital gains tax concessions and dividend imputation have been a central battle in the federal election campaign.

Labor has set out how those changes and a crackdown on multinational tax avoidance would allow it to fund spending promises on education and health care, while also bringing the budget back into surplus.

Labor's costings show it intends to match the Coalition's surplus this coming financial year, but promise a quicker reduction of debt.

"We will show bigger budget surpluses over the forward estimates and the medium-term, achieving a surplus of 1 per cent of GDP by 2022-23, four years earlier than the current Government trajectory," Shadow Treasurer Chris Bowen said.

"The Liberals' claim about the amount that Labor will raise from its tax reform decisions is wrong.

"Labor has consistently said further tax relief can be prudently provided when the budget is back in healthy surplus, if the economic and fiscal circumstances allow — that is reflected in Labor's final fiscal plan."

Get a wrap of the key stories and analysis from the ABC's chief politics writer Annabel Crabb. Sign up

View Privacy Policy More Newsletters Download the ABC News app

The budget the Coalition released last month projected a surplus of $7.1 billion for the 2019-20 financial year.

Speaking on RN Breakfast, Mr Bowen committed a Labor government to a $7.5 billion surplus in 2019-20 if elected next week.

He projected a $13 billion surplus in 2020-21, $2 billion more than the Coalition's forecasted $11 billion surplus.

The Shadow Treasurer conceded voters could be surprised that his party was projecting larger surpluses than the Coalition.

"I accept it's unusual, perhaps historically, for the Labor Party to go to an election promising bigger budget surpluses," Mr Bowen said.

"But it's right for the times because we do believe that the economy needs a bigger buffer.

"We need a fighting fund for the economy."

'Labor can't manage money'

The Coalition has described Labor's key policies as tax hikes, with Prime Minister Scott Morrison repeatedly warning of the economic consequences of a Labor government.

He said it had taken the Coalition six years to repair the budget from when Labor was last in power.

"We're getting the budget back into surplus for next year," the Prime Minister told the ABC.

"We've done that not by raising taxes, but by getting spending under control.

"Labor can't manage money and when you can't manage money you can't run the country and you always end up spending more than you save."

But Mr Bowen will use his party's costings to argue households are paying $18,600 on average each year to fund the tax concessions.

"There is a first- and second-class tax system in Australia," Mr Bowen said.

"If you have access to good advice and your income comes through family trusts, if you have the ability and means to maximise your concessions, then you get first-class treatment.

"If you are a normal pay-as-you-go worker then you pay very close to the headline tax rate."

In previous election campaigns, opposition parties have released policy costings only a couple of days before polling day, but this time Labor is releasing the details eight days before the May 18 poll.

Topics: government-and-politics, elections, federal-elections, federal-government, parliament, federal-parliament, tax, budget, australia

First posted