Coalition tackled on $377m budget gap

coilation-hockey-conferenceLABOR has aimed what it believes is a hammer blow to Tony Abbott’s campaign for the election.  It has produced independent modelling identifying a $377 million hole in the Coalition’s Education Tax Refund policy. The government last night released an analysis by the National Centre for Social and Economic Modelling which found the refund would cost at least $1.14 billion instead of the $760m claimed by the Coalition when it released the policy. The claims continue the dispute over election costings which has raged for the past week, with each side of politics portraying the other as shifty and incompetent. 

The Coalition’s education rebate plan expands the existing education rebates to allow parents to claim for private school fees, music lessons and language lessons. It goes beyond Labor’s promise to broaden the rebate to cover school uniforms.

Last night, after Julia Gillard and the Opposition Leader took part in a town-hall-style meeting in Brisbane, the government released a statement saying it had asked the centre to test the Coalition’s $760m costing of the promise after the Opposition refused to submit its promises to the Treasury and the Department of Finance for costing under the Charter of Budget Honesty.

The statement said the modelling proved there was a substantial black hole in Coalition costings, demonstrating Mr Abbott’s unfitness to govern.

“If the Coalition had complied with the Charter of Budget Honesty, this costing would have been undertaken by Treasury and Finance, and the Australian people would have known the real cost,” the statement said. “However the Coalition clearly had something to hide by refusing to participate in the independent Charter of Budget Honesty process.”

The Prime Minister said NATSEM’s costings came just hours after Opposition finance spokesman Andrew Robb lauded the centre’s professionalism and accuracy.

“Today NATSEM revealed that there is a $377m black hole in one of Tony Abbott’s policies,” Ms Gillard said. “Tony Abbott has made $38bn worth of promises. If Tony Abbott is out by even less than this in his other policies, that raises a big risk that the budget won’t be in surplus by 2013.”

The claims came after the Coalition released its privately obtained costings which included $9bn in new budget cuts and delivered a claimed surplus twice the size of Labor’s.

And they come after The Australian first alerted voters on July 24 that there were inconsistencies on both sides of politics in regard to their respective education rebate schemes.

The article revealed that claims of a black hole in the Coalition policy were based on an error in the estimate of eligible students and that the error had originally been made by Labor.

It said Labor had released two figures about how many children would be eligible: 2.1 million and 2.7 million. The Coalition had used the 2.7 million figure when calculating its costings, it said, when the true number was 2.1 million.

Labor’s statement released last night said NATSEM used a micro-simulation model to provide estimates of the projected cost of the Coalition’s proposed expansion of the refund, assuming a 15 per cent increase in the number of eligible claimants.

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