In a final push to claim economic superiority, the Coalition has pledged that its budget deficits would be at least $10 billion smaller than Labor’s over the next four years.
Although both major parties have largely avoided detailed discussions about long-term budget repair during the campaign, the Coalition plans to argue that its fiscal strategy would reduce gross debt by $40 billion in 2028–29, compared to the government’s current projection of $1.22 trillion.
A Coalition insider revealed the budget position would be “materially better,” with forward estimates reflecting a narrowed deficit in the “low double digits.” Shadow Treasurer Angus Taylor is expected to unveil the full costings on Thursday.
“Labor has delivered the longest per-capita recession in history and the steepest drop in living standards among developed nations,” Taylor will argue. “This isn’t bad luck — it’s bad management. Despite raking in nearly $400 billion in extra revenue, Labor spent rather than saved, leaving the country vulnerable to the next economic downturn. We’ll restore the nation’s fiscal buffer, reduce debt, and initiate genuine budget repair — that’s what responsible economic management looks like.”
Coalition to target over $100 billion in Labor spending
During the campaign, Opposition Leader Peter Dutton committed to at least $48 billion in new spending, including increased defence funding, a temporary fuel excise cut, the return of the low and middle income tax offset, and improved Medicare bulk billing.
To offset these commitments, the Coalition plans to cut more than $100 billion in Labor initiatives, including debt-financed investments in energy infrastructure and housing. Additional savings are expected through reductions in public service spending and the elimination of Labor’s student debt relief measures.
The release of the Coalition’s costings comes just days after a major global ratings agency cautioned both parties that without fiscal reform — either through spending cuts or tax changes — Australia’s AAA credit rating could be at risk, especially in the event of falling commodity prices or other shocks.
Taylor said on Wednesday that he’s addressing “two budgets” — one to support struggling households who have been “devastated” under Treasurer Jim Chalmers, and the other to repair what he described as a federal budget mismanaged by someone who “doesn’t understand how economies or budgets work.”
While Labor has been pressuring the Coalition to clarify how it will pay for major promises — including Dutton’s nuclear energy plan — it released its own costings on Monday, identifying more than $6 billion in savings primarily through reduced reliance on consultants. These savings will offset roughly $10 billion in election commitments, with the $4 billion difference already included in the current federal budget.
Among the Coalition’s highest-cost commitments are a $21 billion defence increase over four years, a $10 billion plan to deliver a $1,200 tax offset, a 25-cent fuel excise cut costing $6 billion, and a proposed mortgage interest tax deduction worth $1.6 billion. Additionally, a $243 million business lunch deduction is also on the table.
The opposition is expected to argue that budget conditions will improve under its leadership, in part due to assumed gains in productivity.
Treasurer Chalmers has warned voters to be wary of the Coalition’s costings, accusing them of inflating outcomes with optimistic assumptions. “Keep an eye out for dodgy productivity forecasts when they finally release the numbers,” Chalmers said. “They’re also hiding the severe cuts needed to fund their nuclear fantasy, which apparently begins construction the day after the election.”
