News Election 2019 Fight ignites over tax truths as Josh Frydenberg releases Labor costings

Fight ignites over tax truths as Josh Frydenberg releases Labor costings

Treasurer Josh Frydenberg has slammed the super industry for urging the government to reconsider one of the people appointed to a retirement income inquiry. Photo: AAP
Twitter Facebook Reddit Pinterest Email

Scott Morrison stands accused of being “caught out lying” after Treasury revealed it did not come up with the $387 billion total for Labor’s tax bill.

The Treasurer released the “Treasury costings” of Labor’s policies on Thursday night.

Shadow Treasurer Chris Bowen revealed on Friday that Treasury had explained the circumstances of the costings and it involved the Liberal Party asking officials to cost individual tax policy ideas without telling the Treasury it was costing Labor’s policies.

After asking Treasury to cost a number of tax options, the Treasurer’s office then added together all of the individual costs to come up with the $387 billion figure.

“The Treasury has rejected the Prime Minister and Treasurer’s claims today that Treasury has costed Labor’s tax policies,” Mr Bowen said.

“Scott Morrison has been caught out lying about Labor again. This is a humiliating rebuke and confirms that Scott Morrison cannot be trusted on the economy.”

Treasurer Josh Frydenberg has warned Labor leader Bill Shorten would hit each household with new taxes worth the equivalent of $5400 within a decade if he is elected.

The Morrison government has revealed it commissioned Treasury to cost Labor’s policies before entering into caretaker mode – a practice Labor’s Chris Bowen described as “dodgy”.

The Liberal Party said Treasury had forecast that Mr Shorten is planning $387 billion in “new taxes on your income, your house, your savings and your super”.

The new figure represents almost double the previous Coalition estimates of $200 billion in new taxes under a Shorten government.

The Labor Party has previously disputed that figure, arguing it does not take into account tax cuts.

“Every time Bill Shorten opens his wallet, you need to check yours,’’ Mr Frydenberg said.

“Whatever Labor promises is funded on the back of $387 billion of new taxes on your income, your house, your savings and your super.

“Australia cannot afford Labor.

“It’s taken the Coalition years of responsible economic management to fix Labor’s budget mess. Now is not the time to return to Labor.”

Battle over Treasury costings

Labor’s shadow treasurer Chris Bowen launched a pre-emptive attack on Thursday night over the costings.

Mr Bowen said asking Treasury to cost election policies was not standard practice, given that was the job of the independent Parliamentary Budget Office.

“This is what Josh Frydenberg has given out to the media tomorrow, dodgy “Treasury costings” of Labor policies,” he tweeted.

“Given Treasury has said repeatedly they don’t cost Labor’s policy, someone has got some explaining to do.”

But the Liberals were quick to point out former Labor Treasurer Wayne Swan was has previously asked Treasury to cost Liberal policies and then leaked them to a newspaper.

Labor has its costings prepared by the independent Parliamentary Budget Office, which was established in 2010.

Mr Frydenberg said the Treasury costings indicate that Labor’s tax hit on the economy has almost doubled from their initial costings.

This was equivalent to an extra yearly household tax bill of $5400 within a decade.

The Treasurer has criticised Labor for refusing to put a cap on taxes as a share of the economy.

“This is because under Labor their tax-to-GDP ratio would increase from 23.3 per cent in 2019-20 to 25.9 per cent in 2029-30, which would make a potential Shorten government the highest taxing in Australia’s history,” Mr Frydenberg said.

“In 2013, after the coalition came to government, Chris Bowen set a test for the government to keep taxes below 23.7 per cent of GDP.

Now Labor has abandoned any tax-to-GDP cap because there is no limit to the taxes they want to hit the Australian people with.”

The Morrison government is pledging a “speed limit” on taxes at 23.9 per cent of GDP and we are well below that at 23.3 per cent in 2019-20.

The Coalition argues its tax plan including a $1080 tax return rebate for low- and middle-income earners will be paid this year when workers lodge their end-of-year tax returns from July 1, 2019.

The original $200 billion figure has increased as a result of Labor’s confirmation it would not support the Coalition’s entire personal income tax cut package.