IT’S the one topic Tony Abbott has been keen to avoid since the campaign started.
And no wonder, when yesterday he contradicted his shadow Treasurer Joe Hockey on the Coalition’s Budget costings to the tune of around $7 billion.
With the economy a front-and-centre issue of the election campaign, Mr Abbott yesterday began the day by claiming that the Coalition’s current expenditure would be under $18 billion.
Only hours later Mr Hockey revealed during a debate with Treasurer Wayne Swan that the figure was in fact $25 billion.
It got even worse when the Nationals’ Barnaby Joyce tried to resolve the issue and had to admit he didn’t actually know.
It was left to the Coalition’s finance spokesman Andrew Robb to try to explain that the two figures were different because one took into account Labor’s $9 billion mining tax and one didn’t.
Mr Abbott finally cleared the mess up later but not before Labor had made the most of it.
“We’ve announced just over $28 billion worth of Labor spending that we won’t go ahead with,” Mr Abbott said. “There’s $25 billion or thereabouts of expenditure that we will make … that’s $3 billion we’re ahead of the Labor Party on.”
In a sign that Labor’s attack ads on Mr Abbott’s economic credentials are starting to bite, former treasurer Peter Costello was forced to enter the campaign for the first time and publicly defend remarks attributed to him in the ads ridiculing Mr Abbott’s apparent lack of economic sense.
“Let me make it clear, the person I endorse on economic management is Tony Abbott,” Mr Costello said.
The Opposition’s tax plans are also contentious, despite Mr Abbott yesterday endorsing the simpler model contained in Treasury boss Ken Henry’s Tax Review and said it “should be the foundation of Australia’s next round of tax reform”.
Instead of promising action on the tax plan he promised debate.
“Within a month of taking office, a Coalition government will publish all the modelling associated with the Henry recommendations to foster the tax debate that Australia needs and now must have,” he said.
Mr Abbott promised to outline a timetable for tax reform within a year of coming to power.
Under the income tax reform plan proposed by the Henry Tax Review, the current four-stage tax system would be replaced by just two tax rates.
The tax-free threshold would be raised from the current level of $6000 to $25,000.
Those earning more than $25,000 would pay a tax rate of 35 per cent until they earned $180,000, when the top tax rate of 45 per cent would apply.
This tax plan would replace the current 15 per cent, 30 per cent and 37 per cent tax rates with a single 35 per cent rate.
The Gillard Government has not yet responded to the Henry Tax Review’s income tax recommendations, despite last week’s revelations that more than one million Australians could be pushed into higher tax brackets by the next election.