The campaign's real red-heads

With a week to go before election day, pricey promises are piling up and both parties are haemorrhaging red ink.

The Coalition has now chewed up all its savings, including Thursday's round of savings taken from Labor, and is nearly half a billion dollars into the red, as we close in on the last week of the campaign.

Meantime, Labor is over $2 billion in the red on its commitments, despite repeatedly insisting it will not add a dollar to the budget deficit during the campaign.

The Coalition's announcement that it was adopting nearly $1.4 billion worth of savings previously announced by Labor, including one initiative attacked by Joe Hockey, briefly restored it to balance between its announced savings and its election commitments. However, another $320 million worth of promises on Friday for education has sent the Coalition out to a net cost of $450 million for its $23.9 billion worth of promises.

Labor has continued its practice of insisting that all of its promises will be offset by savings, but it is currently nearly $2.2 billion in the red from its much smaller slate of $12 billion worth of promises.

Full value of
new spending commitments $m
Net cost to
Budget over 4 years $m
Labor
12055
-2199
Liberal
23956
-482

Both sides are starting to get ragged in their costings work as the exhausting campaign takes its toll. Andrew Robb took responsibility for a Coalition costings document riddled with typos and mistakes earlier in the week, although he tried to blame the ALP for not making clear what was new spending and what had been announced in the budget, a claim for which he was pulled up sharply by a journalist at his broadband press conference on Tuesday. Coalition policy announcements have now – correctly – stopped saying that promises are offset by previous savings initiatives, but do not say how they will be funded. Labor put out a policy announcement today with no mention of funding at all.

And both sides are making grand announcements for spending beyond the Forward Estimates period of the next four years. Anthony Albanese boasted of Labor's commitment to build the inland rail route (Labor over the past week has claimed it is the only party that can be trusted to build the inland rail route and not build the Goodna Bypass), which will be nearly $5 billion wasted on a colossal white elephant, but not until 2014-15. The Princes Highway duplication ($250 million) and the Parramatta-Epping rail link ($2.1 billion) are all off in the distant future, politically speaking. And the bulk of the Liberals' broadband spending is beyond the Forward Estimates period, as is its promise to build the Mackay Ring Road and, like Labor, the Moreton Bank rail link.

This week also saw the second actual costing blowout. The first wasn't particularly serious – the Liberals appear to have made a $500 million error in the fourth year of its costings for 2800 new hospital beds, but $500 million in the health budget is neither here nor there. But Tony Abbott's confirmation yesterday of the Coalition's June promise to index the Defence Force Retirement and Death Benefits Scheme has allowed Labor to point out, and Andrew Robb to more or less admit, that it will cost far more than the $98 million allocated to it over Forward Estimates and the $100 million Robb says will be put into the Future Fund to cover out-years, with talk of an $8 billion cost over an extended period.

With seven days to go, there'll be plenty of red ink splashed around before polling day.