Bowen caught out on numbers, page-2

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    And he's not the only one using dodgy figures!

    'Chris Bowen says budget surplus propped up by 'dodgy accounting trick'

    Coalition’s tax cuts underpinned by a ‘miraculous’ reduction in government payments, shadow treasurer says.

    The Coalition’s surpluses and future tax cuts for middle and high income earners are underpinned by a “miraculous” reduction in the size of government payments, Chris Bowen warns.In a speech to be delivered on Wednesday the shadow treasurer argues the decade of surpluses predicted by the treasury and tax cuts in last week’s budget are propped up by “dodgy accounting tricks”.Labor is preparing for the imminent federal election campaign by arguing it can deliver larger budget surpluses and higher social spending by opposing tax cuts that disproportionately benefit high-income earners and deductions claimed by housing and share investors.
    With the election expected to be called by the weekend, Labor launched its first ad on Tuesday evening before releasing another plank in its anti-cancer push – a $63m package to fight lung cancer – on Wednesday. The centrepiece is $40m over four years to reboot the national tobacco campaign, anti-smoking ads that will aim to push the smoking rate to below 10%. A further $15m will be spent on lung cancer nurses, $6m to support investment portfolios go tobacco-free and $2.4m to the Lung Foundation Australia to raise awareness.
    In the first Labor ad, Bill Shorten promises a “fair go for Australia” in a positive piece detailing policies to increase wages, spending on schools and hospitals and to fight climate change. With the $2.3bn cancer package in Shorten’s budget reply, Labor is preparing to run a more positive version of its 2016 Medicare campaign.In a speech to be delivered at the National Press Club on Wednesday, seen by Guardian Australia, Bowen is upbeat on Labor’s chances of winning the election but downbeat on the state of the economy.Bowen cites record low wages, softening GDP growth, stalling productivity and a “record high” of household net debt of 190% of disposable income as causes for concern.He says there are “real questions” about the “thin” $9bn surplus in 2022-23 and those projected for the remainder of the decade to 2029.
    Bowen says that finance department officials had revealed at Senate estimates that that surplus was projected in part through a $7.8bn “methodology change” in how government spending is calculated.“We have a surplus by methodology,” he says. “I kid you not.”“More miraculously, under the government’s assumptions, [the] payments to GDP [ratio] free falls from close to 25% of GDP this year – the average level under the Coalition government – to around 23.6% of GDP by the end of the decade, well below historical averages.“The size of government magically shrinks over time. If they are going to cut government services they should outline what they are.”The budget papers state the government has achieved $62bn of “structural savings” since the 2016 election, but does not explain the continued shrinkage in payments.
    Bowen cites an analysis by the Grattan Institute that “achieving such a reduction [in spending] would require significant cuts in spending growth across almost every major spending area, during a period when we know that an ageing population will increase spending pressures, particularly in health and welfare”.“There have not been enough significant savings measures in the past three budgets to explain the turnaround,” the Grattan Institute concluded. “It appears to be more driven by assumption than by reality.”Bowen says that wages are projected to “magically jump up to 3.5% by the end of the forward estimates propping up future forecasts” with “no hint of a plan from the government as to how this is meant to happen”.While the Coalition claims that after stages two and three of its tax cut package workers on the average full-time wage will be $1,000 a year better off, Labor believes the changes to take effect in 2022 and 2024 are too remote to be believed.
    Bowen warns that the “expensive and regressive” second and third stage of the Coalition’s income tax cuts are “irresponsible” because they depend on the claimed reduction in spending to be affordable. On Tuesday an analysis by the Parliamentary Budget Office revealed the cost of the third and final stage – to flatten tax brackets for middle and high income earners – will cost $30bn a year by the end of the decade and $147bn in total.Bowen says he would be “laughed out of the room” if Labor proposed a $250bn program – the total cost of income tax cuts – without outlining how to pay for them.Bowen rebuts the Coalition’s charge that Labor will impose $200bn of new taxes by noting that KPMG had estimated tax to GDP will be “a touch over 24%” under Labor, equal or lower than it was in five years of the Howard government.
    Bowen argues that Labor is ready for government, after six years with much the same shadow cabinet team and 16 of 21 members having served at the cabinet level before.Labor has a sense of responsibility to “fix our broken politics” and “end the chaos”, he says, promising it will pursue an “ambitious, bold and carefully designed agenda” and be “the sort of government our country deserves”.“I have confidence we will be that government if the Australian people give us that opportunity.”
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