Coalition Says Cuts to Climate, Housing and More Would Save $31 Billion

The Coalition has unveiled $31.3 billion in proposed spending cuts over four years, targeting climate programs, housing initiatives, and welfare eligibility for non-citizens to fund its income tax plan and leave the budget $22 billion better off.

News source: Google /  https://www.abc.net.au/

Opposition Leader Angus Taylor has unveiled $31.3 billion in proposed budget savings, claiming the Coalition can fund its signature income tax cuts while leaving the federal budget $22 billion better off over four years.

The package costed by the independent Parliamentary Budget Office, targets climate programs, housing initiatives, corporate subsidies, welfare eligibility, and the illicit tobacco trade. Taylor framed the savings as a "down payment" to pay for tax cuts, arguing that government spending is fuelling inflation and keeping interest rates high.

"We see a treasurer and a government that has lost control of its spending. If a government spends too much ... it drives up inflation and interest rates and of course that's what we're seeing in Australia right now - the biggest collapse in living standards of any developed country in the world," Taylor said.

Where the Cuts Come From

More than half of the savings come from slashing climate-related policies. A combined $9.4 billion would be saved by ditching the new vehicle efficiency standard, the electric vehicle discount, home battery subsidies, the Net Zero Economy Agency, some functions of renewables agency ARENA, and Scope 3 emissions reporting for business. Another $7.3 billion would come from ending corporate subsidies, including incentives for green hydrogen, aluminium production, and critical minerals through the National Reconstruction Fund.

Abandoning Labor's housing programs help to Buy, the Housing Australia Future Fund, the New Homes Bonus, and Build to rent incentives would save a combined $4.7 billion. Stripping welfare and NDIS eligibility from permanent residents and other non-citizens would save $2 billion. As previously announced, slashing the tobacco excise and legalising vapes would improve the budget by $7.9 billion over four years, partly based on an assumption that smokers would switch back to the legal cigarette market.

The Political Fight

The announcement comes ahead of a Reserve Bank meeting next Tuesday, with markets expecting another rate hike after Deputy Governor Andrew Hauser said inflation was "materially worse" than expected. Shadow Treasurer Tim Wilson said the package was designed to reduce inflationary pressure rather than simply shift the burden onto taxpayers.

Treasurer Jim Chalmers denied government spending was to blame for inflation, noting private demand was growing faster than public demand. He said the government would outline fresh savings in December, calling it the ninth consecutive budget update with savings measures.

Housing Minister Clare O'Neil's spokesperson criticised the plan: "You cannot fix a housing shortage by cutting the programs that help build homes. Australians need more homes, and Angus Taylor is promising less support to build them."

Here is the question The Silicon Review raises. The Coalition has found $31 billion in savings by targeting climate and housing programs that Labor says are essential to the transition and the crisis. When a party funds tax cuts by cutting the programs its opponents call foundational, is it offering fiscal discipline or simply choosing which Australians pay for the others' relief?

FAQ:

Q: What is the total value of the Coalition's proposed cuts?
A: The Coalition has proposed $31.3 billion in savings over four years, costed by the Parliamentary Budget Office.

Q: What climate programs would the Coalition cut?
A: The Coalition would scrap the Net Zero Economy Agency, reform ARENA, and end electric vehicle tax concessions, home battery subsidies, and Scope 3 emissions reporting, saving $9.4 billion.

Q: What housing programs would the Coalition cut?
A: The Coalition would scrap Help to Buy, the Housing Australia Future Fund, the New Homes Bonus, and Build to rent incentives, saving $4.7 billion.

Q: Does the savings package fund the Coalition's tax plan?
A: Yes. The $31.3 billion in savings more than offsets the $9.7 billion cost of the Coalition's income tax policy to index brackets and scrap the $250 workers' tax offset.

Q: What did Treasurer Jim Chalmers say about the cuts?
A: Chalmers denied government spending was to blame for inflation, noting private demand was growing faster than public demand, and said the government would outline fresh savings in December.