Likewise,such decisions leave the budget more vulnerable to future shocks.
The Coalition also claimed a $5.1 billion saving by eliminating waste “through improved financial controls”,although it has done little to outline how this would work in reality. There is also a $6.7 billion claimed from a decision to privatise the operation of two Victorian sewerage plants (through a 50-year lease).
Labor’s policy document is comparatively clear,but it,too,is guilty of shuffling money around to pad out the budget in 2025-26,ahead of the 2026 election.
For example,it has claimed an extra $3 billion by delaying payments into a fund set up to meet (by 2035) billions of dollars in unfunded superannuation liabilities chalked up under the old defined benefits scheme for public servants. Again,this serves to impose higher costs on future taxpayers.
It is tantamount to a buy-now-pay-later approach to budget management.
The Coalition dished out $10.7 billion worth of health announcements during the campaign,mostly for new or upgraded hospitals,a cost neatly offset by shelving the first stage of Labor’s Suburban Rail Loop.
Labor,on the other hand,announced about $4 billion for new and upgraded hospitals,and $620 million worth of ongoing health spending announcements.
It’s hard to argue against investing in hospitals,given the social returns they can generate.
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However,the cost does not simply stop once the bricks and mortar have been laid,or the high-tech machines installed.
As health economist Stephen Duckett and others have warned,capital spending announcements on health by both sides have also created a financial time bomb.
Every $1 of capital spending on new hospitals is said to generate about 50¢ of future recurrent costs,that will be needed to staff and run the hospitals on an ongoing basis.
Yet there has been very little discussion about how these and other future challenges can be met.
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