The Abbott government is claiming to have inherited a spending blow-out in the final year of its four-year budget, with the former Labor government allegedly pushing huge increases in spending on foreign aid, defence and health into its fifth year budget last year.
The budget is always done on a four-year term, which Federal Treasurer Joe Hockey said in Parliament yesterday allowed Labor to conceal a “massive tsunami” of planned spending in last year’s budget.
“For the first time, we are starting to get a picture of it…In defence, we see an increase of 13% in one year—back ended expenditure by Labor. They said it would not be more than 2%. For overseas aid, foreign aid, Labor back loaded in the fifth year a 66% increase in foreign aid,” Hockey says.
On top of these increases it was revealed spend on education would also rise by 3.5% and health expenditure would jump 4.2% in 2017-18.
Disability spending was also said to increase by 125% by 2017-18, as the National Disability Insurance Scheme came into effect.
The release of the information comes as the Abbott government attempts to soften the public reaction to the upcoming May budget.
Earlier in the day, Prime Minister Tony Abbott told MPs in the last party room meeting before the budget to remind voters the nation’s finances were an “absolute, cataclysmic mess”.
Hockey says Labor engaged in “insidious activity” when it allocated this spending for 2017-18, but the opposition rejected this notion, saying if its budget was adhered to, it would be $46 billion better off in 10 years.
Labor Treasury spokesman Chris Bowen said in Parliament that Hockey’s figures were “another example of the Treasurer cooking the books to artificially inflate debt and deficit”.
“Joe Hockey has now tried every tactic in the book to artificially inflate debt and deficit,” Bowen said in a statement.
“He is looking for any excuse to provide and alibi for to mislead the Australian people about the government’s legacy.”
Opposition leader Bill Shorten is set to give a speech today to the National Press Club which will explain how Labor will test the government’s budget.
According to The Australian,Shorten will warn the Coalition against spending cuts to schools, science, trade training, pensions, disability and war veteran pensioners.
However, many are fearful the contrasting claims about the budget deficit come as the government plans hefty cuts in this year’s budget.
Council of Small Business of Australian executive director Peter Strong told SmartCompany putting pressure on small business will not bolster the economy.
“If you want the budget to be back into surplus, it’s small business which will do it,” he says.
Strong says members are feeling worried any “extreme” saving measures will end up harming small business.
“If we want to get the budget back into surplus, concentrate on the majority of business, small businesses, and let them do what they need to do. Encourage small businesses to innovate and have the confidence to spend money.”