Hockey announces $6bn budget improvement

Shadow Treasurer Joe Hockey will release the coalition's full list of costings on Thursday. Source: AAP

SHADOW treasurer Joe Hockey says a coalition government will make some $40 billion of savings, if it wins the federal election.

Mr Hockey and coalition finance spokesman Andrew Robb on Thursday announced another $9 billion tranche of savings, on top of the $31.6 billion worth announced last week.

They also announced $33 billion of proposed expenditure and said the budget bottom line would be improved by $6 billion under a coalition government.

"Only the coalition will live within its means and get Australia back on the path of strong economic growth," they said in a statement.

The coalition is also promising a $16 billion reduction in government debt over the budget forward estimates.

It has submitted about 200 policies to the Parliamentary Budget Office (PBO) and says its figures have been assessed by three public finance experts.

These are Geoff Carmody, co-founder of Access Economics; Len Scanlan, a former Queensland auditor-general; and Professor Peter Shergold, a former secretary of the Department of Prime Minister and Cabinet.

The PBO found its plan to abolish the carbon tax would deliver a $1.1 billion contribution to the budget because of an associated surge in economic growth.

Mr Hockey and Mr Robb said the coalition's "prudent" economic plans would leave the budget better off and generate stronger growth.

"We have been careful and methodical in our assessment of our savings and responsible and prudent in our spending promises," they said.

A key part of the coalition's strategy is a major infrastructure package, involving almost $5 billion of additional funding over the forward estimates period on key projects.

"Unlike Labor we have not shifted important projects well off into the never-never," they said.

However, it wasn't feasible to continue with the current rate of growth in Australia's foreign aid budget.

A coalition would cut this growth and instead index future increases to the consumer price index.

This would free up $4.5 billion, which would be allocated to other coalition priorities, including road projects.

As previously announced, the coalition also plans to cut the company tax rate to 28.5 per cent, from 30 per cent.

It will also ditch Labor's $1.8 billion changes to fringe-benefit tax arrangements on vehicles.

The coalition has previously said Australia is facing a "budget emergency".

Asked whether a $6 billion budget improvement was enough to offset this, Mr Hockey said: "I don't see a $6 billion improvement in the budget bottom line as trivial."

"I see it as significant," he said.

"We are turning around the direction of the budget.

"Under Labor the deficits are getting bigger and the debt is getting bigger."

Mr Hockey said the current rate of increase in foreign aid funding couldn't continue.

"We have to cut the growth in foreign aid to fund Australian infrastructure, because the stronger the Australian economy, the more generous we can be in the future," he said.

He denied the coalition was breaking Australia's commitment to foreign aid.

"No, it's Labor that has broken it's promise every year in relation to foreign aid, every year," he said.

Mr Hockey said fixing the federal balance sheet had to come before the Millennium Development goal to increase foreign aid to 0.5 per cent of gross national income (GNI).

"We still are committed to the millennium goals but we've got to fix our budget first," he said.

"We are determined to fix this Australian budget and if we fix the Australian budget we can be more generous with foreign aid - I can't give you a timetable on that."

The current Labor government budget has committed Australia to boosting foreign aid to 0.5 per cent of GNI by 2017/18.

The aid budget was $5.7 billion in 2013/14.

Mr Hockey also said he hoped Australia's unemployment rate won't reach 6.25 per cent, as forecast by Treasury, under the coalition's strategy if it won government.

The "worst thing" a government could do was cause jobs losses.

"We've got to do everything we can to arrest the increase in the unemployment rate," he said, adding that improving growth would take the jobless rate down.

The coalition will provide more money for health, education, agriculture and disadvantaged regions, as well as fairer indexation of veterans military superannuation, policies to increase workforce participation, and more secure borders.

"When Australians head to the polls on Saturday there need not be any doubt in their minds about how we will pay for our policies and improve the budget position," it said.

The Pre-election Economic and Fiscal Outlook prepared by Treasury and Finance projected a run of budget deficits before 2016/17 when a surplus of $4.2 billion is expected.

The coalition's figures show they expect to be able to improve that surplus figure by $576 million.

Mr Hockey said a coalition government would increase funding for health and education, despite what the prime minister said.

"Kevin Rudd said cut, cut, cut. We are not cutting health, we are not cutting education, and we're not cutting defence. As you can see our numbers are plainly there," he said.

Asked whether an incoming Abbott government would have a mini-budget, Mr Hockey said: "If the Australian people endorse us on Saturday I'd say we will talk about that afterwards."

Mr Hockey said the coalition was looking for voters to "end the chaos in Canberra".

"No more minority parties, no more waste, no more lies from Labor - the Labor party is broken and the Australian people have a chance on Saturday to reclaim their country."

Deputy Prime Minister Anthony Albanese said he had an absolute problem with the coalition slashing $4.5 billion from foreign aid to fund infrastructure projects.

"We don't know where all that money is being spent, they say it's for infrastructure," Mr Albanese told Sky News.

"It doesn't add up. At the same time they are ripping $8 billion out from the infrastructure budget."

He said it was no wonder Mr Hockey was melting down on national television while announcing the savings.

"I mean if I was standing there talking about infrastructure when we were cutting $8 billion from the infrastructure budget, I'd be melting down as well," he said.

"It was a farcical performance."

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