Coalition voter ‘bribes’ send Taylor ‘off brand’ with bigger deficits, say budget experts

The Coalition enters the dying hours of the 2025 election campaign defending its budget against charges from some of the nation’s top economists that it erodes the Coalition’s self-declared legacy of fiscal responsibility.

Rather than smaller deficits or even a forecast surplus, shadow treasurer Angus Taylor on Thursday revealed a future Dutton government would deliver bigger budget deficits than Labor in its first two years.

That was because it would collect less revenue following its campaign promises to cut fuel excise and deliver a $1,200 tax break for middle Australia.

“The best thing about them is that they’re temporary”.

He said while Labor has “long since abandoned [former Labor treasurer Paul] Keating’s rationalism and discipline” the Coalition has equally turned its back on John Howard’s economic approach, even if the shift was “more gradual and to some extent more recent.”

“The election is a competition of bribes that ignore the fundamental challenge that Australia faces,” he said.

Coalition costings released on the second-last day of the federal election campaign showed a deterioration of $7.9 billion over the next two financial years, compared to Treasury’s pre-election figures.

Over the following two years, the Coalition claims a $21.2 billion improvement, partly because of savings from cutting 41,000 Canberra-based public servants.

That trajectory would trim the overall underlying four-year cash deficit by $14 billion to $131 billion and lower gross debt by $40 billion to about $1.18 trillion in 2028-29.

One prominent conservative newspaper columnist, The Australian’s Judith Sloan, said the debt cut was equivalent to 0.003 per cent of the estimated fourth-year total. 

“Definitely a joke,” she wrote.

The figures add to signs the Coalition has gone through an internal struggle to balance the trade-offs between short-term political sugar hits and its declared desire to balance ballooning future spending commitments on defence against ongoing structural deficits.

Peter Dutton told the ABC in January that the government was adding to Australia’s inflation problems with “sugar hits” in the form of support to households.

“People are smarter than that,” he said at the time. 

“They realise that what it’s doing is keeping their mortgage rates higher for longer.”

UNSW economics professor Richard Holden said the Coalition’s budget plan has failed to create a clear distinction against Labor

“They’re not on brand,” said Professor Holden of the Coalition’s budget plan. 

“There’s no way you can say it’s economically conservative.

Economist Saul Eslake was the most scathing, describing Mr Taylor’s budget plan as “buy now, pay later”, while scoffing at the Coalition’s professed public service reduction target.

“What’s that going to do to Taylor’s [Treasury] department if he gets to become treasurer?,” Mr Eslake said.

He also questioned the need for looser fiscal policy under the Coalition’s first two years.

“Unless you think Trump is going to throw the world into a recession, and therefore it’s appropriate we have looser fiscal policy, the economy is turning a corner.

“Why should we be expanding the deficit, particularly when interest rates are coming down?”

Mr Taylor, who has not given a year for when the Coalition would return the budget to surplus beyond saying it would be “faster than Labor”, insisted he was balancing the need to balance the budget against helping household budgets.

On the Coalition’s long-term plan to wind back Labor’s reliance on off-budget “investments” in areas such as renewables, professor Holden was supportive.

“But when you add up all the stuff they’re doing and it’s only $40 billion less debt over the forward estimates, that suggests there’s still a lot of money going out the door.”

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