Labor forecasts larger surplus than the Coalition
LABOR says it will reform Australia's "two-class tax system" and is promising to deliver a Budget surplus double that of the Coalition's.
Labor has revealed today how it will pay for its election promises, including big increases to funding for health, schools and infrastructure.
HERE ARE THE MAIN POINTS:
• There will be $154 billion in extra revenue over 10 years, coming from five areas of tax reform - franking credits, negative gearing and capital gains tax, trusts, multinationals and accountant deductions, and superannuation concessions;
• Most of that money will go towards higher spending, particularly on health and education. The rest with strengthen the Budget bottom line;
• Labor is promising to match the government's surplus in the next financial year, followed by bigger projected surpluses in each subsequent year;
• It boasts a projected surplus of 1 per cent of GDP by 2022/23. That would mean a surplus of $22 billion, compared to the Coalition's forecast surplus of $9.2 billion;
• The costings include an assumption that a Shorten government will provide further tax relief to Australians when the tax to GDP ratio hits 24.3 per cent, which is the level it was at under the Howard government.
Shadow Treasurer Chris Bowen released the Budget costings, telling reporters "this is the earliest any Opposition has released its costings ever."
"Of course in 2013, the last time the Liberal Party was in opposition, they released their costings 36 hours before the people went to the polls. Here we are before the last week starts, releasing our costings."
Mr Bowen said Labor would deliver a bigger Budget surplus "each and every year" and would bring the Budget "back in black" next year - at the same time Coalition said it will.
However, Labor is promising to deliver a surplus double that of the Coalition's within three years.
"We will reach a surplus of 1 per cent GDP four years earlier than the government is forecasting," Mr Bowen said at a press conference today.
He said the surplus in 2022/23 would be $21.7 billion, this compares to the Coalition's forecast of $9.2 billion, which it revealed in its Budget this year.
Mr Bowen said Budget surpluses under Labor would be bigger over the forward estimates and the decade cumulatively.
So how will Labor pay for these surpluses and its ambitious election promises?
Labor says it will raise $154 billion over 10 years from five areas of tax reform: dividend imputation, negative gearing and capital gains tax, trusts, multinationals and accountant deductions and superannuation concessions.
Mr Bowen said Labor was taking a proactive approach to closing down and reforming tax loopholes that overwhelmingly benefit wealthy individuals.
"If your income comes from a certain place, you have good accounting advice, you get access to the first class tax system," he said.
"If you are a normal taxpayer, it's the very basic deductions, economy class for you."
Mr Bowen said Labor is reforming the tax system and that the Liberals were running a "dishonest" campaign about who is impacted.
He said 96 per cent of Australians would be unaffected by the abolition of franking credit refunds, 99 per cent would be unaffected by the changes to tax deductions, and no one who currently negatively gears property would be affected by that policy, since it is grandfathered.
Mr Bowen said credited the hard work of the Labor team to identify and modernise Australia's tax system to make it fairer and better.
"We have done our hard work," Mr Bowen said.
"There are bigger investments in health and education, bigger surpluses, and we are ready for government."
The Shadow Treasurer also flagged more tax relief for Australians but would only do this when the tax to GDP ratio hits 23.4 per cent, which is equivalent to that under the Howard government.
"When the budget returns to sustainable surplus, that is when tax relief can prudently and sensibly be delivered," he said.
Mr Bowen said Australia would remain a low-taxing country compared to other similar OECD countries like the United Kingdom, New Zealand, Germany and Canada.
Money generated from cutting back on tax loopholes will go towards bigger surpluses as well as Labor's election promises, including better funding for hospitals and schools, the Medicare cancer plan, cheaper child care, a pensioner dental plan, roads and rail projects and tax cuts for 10 million workers.
Earlier Mr Bowen told ABC Radio National: "Under a Shorten Labor government you get fairer taxes, you get bigger budget surpluses and you get much more investment in schools and hospitals.
"We've done that through the very comprehensive policy agenda we're taking to the people - a very stark difference to the government who has played a small target approach."
But Liberal campaign spokesman Simon Birmingham said 1989 was the last time Labor delivered a budget surplus.
"Many Australians today are going to hear the Labor Party claiming that Labor will deliver bigger surpluses and they will see pigs flying through the sky," he told Nine's Today on Friday.
- with AAP