Coalition Unveils Policy Plan With $14 Billion Budget Improvement

Coalition reveals a $5.6 billion early deficit, followed by a $9.5 billion budget improvement by 2027–28.

Shadow Treasurer Angus Taylor at a press conference at Parliament House in Canberra, Australia on Feb. 17, 2022. AAP Image/Mick Tsikas

The federal Coalition has unveiled its long-awaited policy costings, pledging to improve the federal budget bottom line by nearly $14 billion over the next four years and reduce government debt by more than $40 billion by 2028–29.

Describing it as the most significant fiscal shift in 15 years, Shadow Treasurer Angus Taylor said the Coalition could return the budget to surplus faster than Labor by curbing waste and axing several expensive government programs

The Coalition expects the budget to be $13.9 billion better off compared to current forecasts.

Taylor said the strategy strikes a balance between fixing the budget and giving people “vital immediate relief.”

“Our economic plan will strengthen the budget, deliver relief now, and prepare us for the future,” Federal Opposition Leader Peter Dutton said in Brisbane.

“Australians know the economy is always better managed under a Liberal-National government.”

How the Coalition Will Pay for It

To finance its promises, the Coalition plans to scale back the federal bureaucracy and scrap several of Labor’s signature off-budget investment funds.

This includes the $10 billion Housing Australia Future Fund, the $20 billion Rewiring the Nation Fund, and the National Reconstruction Fund. The Coalition labelled them “ineffective” and inflationary.

Shadow Finance Minister Jane Hume said a hiring freeze and natural staff turnover would also reduce the public service by 41,000 Canberra-based roles.

“This brings the APS back to sustainable levels, without touching front-line services or national security,” she said.

The move is expected to save $1.6 billion in 2025–26 and $3.4 billion in each of the following two years.

Hume pointed to warnings from the IMF and S&P Global, which have cautioned that such off-budget funds obscure the real fiscal position and could fuel inflation. She emphasised that Australia is at risk of losing its AAA credit rating under Labor.

In addition, the Coalition will cancel Labor’s student debt relief program, saving $16 billion, and reverse plans to limit super tax concessions for accounts over $3 million.

It will also abandon Labor’s shared-equity housing scheme, where the government would co-own a portion of a buyer’s home.

Relief at the Bowser, Tax Cuts, and Defence Splurge

The Coalition plans to spend the savings on a range of voter-facing policies, including:

• Halving the fuel excise for one year at a cost of $6 billion
• Delivering a $10 billion tax cut, offering up to $1,200 to 10 million workers
• Creating a $1.25 billion mortgage interest tax deduction for first-home buyers.
• Boosting defence spending by $21 billion over five years.

The Coalition has also pledged to match Labor’s $8.5 billion bulk-billing incentive scheme “dollar for dollar,” to maintain Medicare access.

Nuclear Power Investment

A key feature of the plan is a commitment to building zero-emissions nuclear power plants to replace retiring coal stations.

Two sites are planned to be operational by the mid-2030s, followed by a nationwide rollout by 2050.

The Coalition has budgeted $36.4 billion in equity funding through 2035, rising to $118.2 billion by mid-century. Taylor said these investments are “fully accounted for” in the financial plans.

Redirecting Savings to Regional and Energy Projects

Not all savings will go towards reducing debt. Some will be channelled into regional and energy security initiatives.

These include a $5 billion Regional Australia Future Fund—financed with funds from the scrapped Rewiring the Nation Fund—and a Critical Gas Infrastructure Fund to support energy reliability.

The Opposition has also promised to lift the federal moratorium on nuclear technology immediately upon forming government.

Labor’s Modest Savings Dwarfed

The Coalition’s figures dwarf those released by Labor earlier this week, which projected a $7 billion budget improvement through reduced spending on consultants, labour hire, and higher visa fees for international students.

The Opposition insists its cuts go deeper and are paired with more ambitious reform.

“Good economic management is about preparing for the future—not just patching up the present,” Hume said.

Whether voters will be convinced by the balancing act between tax relief, defence and energy investments, and cuts to Labor’s key programs remains to be seen.