Friday, 15 July 2022

Australian Parliamentary Office releases post-election report on the cost of election promises made during the 2022 election campaign

The Australian Parliamentary Budget Office (PBO) released its 2022 Election commitments report on 14 July 2022.

The report stated in part:

The report includes commitments expected to have a material impact on the Australian Government budget. In the lead-up to the election, the PBO identified and assessed almost 2,000 relevant election commitments and determined that 314 of these met the criteria for inclusion in this report. Of those items, 41 are commitments by the Coalition, 154 by the Australian Labor Party, 99 by the Australian Greens, and 20 by the independent member for Indi…..

As is often the case for the party in government, the Coalition also announced policies in its budget update, released prior to the election, resulting in fewer Coalition commitments included in this report compared to the other major parties.

Major Parties Net Impact of Election Commitments

Indi Independent's Net Impact of Election Commitments

This is how The Guardian reported PBO findings on 14 July 2022:

Labor’s commitment to scrap the cashless debit card will save $286.5m over four years, the Parliamentary Budget Office has revealed.

On Thursday the PBO released election costings showing that Labor’s policies would add $6.9bn to budget deficits over four years and a further $33.6bn would be spent in off-budget investments including for housing and the electricity grid.

Before the election Labor had estimated its policies would cause deficits to be $7.4bn bigger over four years, despite measures to crack down on multinational tax avoidance and save on the public service’s use of contractors.

The PBO found Labor’s most expensive promises were cheaper childcare ($5.1bn over four years) and fixing aged care ($2.5bn).

But it also identified savings, including from abolishing the cashless debit card and mandatory income management, which Labor did not estimate due to “commercial sensitivities”. Over 10 years that measure would save $786.9m, the PBO said.

The cashless debit card and income management scheme quarantines up to 80% of a person’s welfare payments onto a card with which one cannot withdraw cash or buy alcohol.

The Coalition extended the scheme for two years in December 2020 after failing to win support to make it permanent in four sites. The auditor general later found the Morrison government had not demonstrated whether the scheme was working despite operating trials across the country for more than five years.

Labor pledged to scrap the “privatised” Indue-operated cashless debit card, though smaller welfare income management programs requested by a local community could continue.

The PBO said overall its estimates “are not materially different from the costs for the forward estimates period released by Labor prior to the election”.

While there are some material differences for individual commitments, when taken together, these differences amount to not more than 0.1% of GDP in any given year.”

The PBO noted 11 Labor policies that added to off-budget spending (such as loans and equity) to finance promises including public housing upgrades, the Help to Buy housing scheme, the Powering Australia plan and the National Reconstruction Fund.

The promises would result in the headline cash balance being $33.6bn lower over four years, or $62.7bn over 10 years…...

The PBO found the Coalition’s policies would have resulted in “slightly smaller deficits”, although the difference was “negligible”.

The Greens’ policies would “result in larger deficits” due to the minor party’s commitments “on both receipts and payments [which] are significantly higher than the other major parties”, it said.

Under the Greens’ policies, revenue as a share of GDP would rise to 29% and deficits would be $6.5bn a year higher than the Coalition…..

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