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Oppn must come clean on ‘black hole’: PM

Prime Minister Julia Gillard is demanding answers from the federal opposition over how it intends to make up a “$70 billion black hole” in its budget costings.

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After spending the past week or so defending her government’s budget position in the face of increasingly volatile financial markets – fearing another global economic downturn – Ms Gillard has turned the tables following a leaked internal coalition document.

It says the opposition would need to find $70 billion to fund some of its plans, such as rescinding the mining and carbon taxes.

Ms Gillard said the opposition had already got itself into an $11 billion black hole during last year’s election campaign because its promises didn’t add up.

“What’s the opposition proposing to do? Not pay pensioners for two years, not pay anyone Medicare for four years? That’s the size of the black hole we are talking about,” Ms Gillard told reporters in Perth.

“They have got some questions to answer, about how on earth they got themselves into this position and how on earth they are going to get themselves out of it.”

The leaked document says it will cost $27 billion to scrap the planned carbon tax and the $8 billion worth of pledged tax cuts.

Opposition Leader Tony Abbott said on Macquarie radio that without the carbon tax, there was no need for compensation.

“These aren’t spending cuts so much, they’re savings to the public because the public won’t have to pay the carbon tax, the public won’t have to pay the mining tax and it is good for people if taxes are lower.”

He said the coalition’s full costings would be released before the next election.

Opposition treasury spokesman Joe Hockey said he was going through the budget “line by line” looking for wasteful government spending.

“The government – Liberal or Labor – will spend $1500 billion over the next four years,” he told the Seven Network.

“That’s a massive amount of money and therefore finding $50 or $60 or $70 billion is about identifying waste, identifying areas where you do not need to proceed with programs.”

But Australian Greens Leader Bob Brown warned that a coalition government would push the economy into recession if it undertook such cuts in the current economic malaise.

“What will be the impact on the nearly one million small businesses in this country if this sort of economic irresponsibility were to be given a go on the Treasury benches,” Senator Brown told reporters in Canberra.

He insisted the coalition submit its policies for costing by Treasury and the Finance Department.

The union representing public servants also said the coalition must come clean about its plans to slash the public service.

Community and Public Sector Union (CPSU) national secretary Nadine Flood said reports that Mr Hockey would not rule out dismantling entire departments if elected were “deeply disturbing”.

“These comments by Mr Hockey show his short-sighted and inconsistent approach to the public service, and his lack of understanding,” Ms Flood said in a statement.

“The coalition is strident with their calls for no jobs to be lost due to a carbon tax but is happy to threaten public servants with the axe just to score a cheap political point.”

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