Costello Rides High As The Loan Arranger

The Age

Thursday October 25, 2001

TIM COLEBATCH

Double standards? In an election campaign, no politician should leave home without them. Treasurer Peter Costello took his to the National Press Club yesterday and they came in handy.

In his only campaign debate with his tagger Simon Crean, Costello was ambushed when Crean declared Labor would hire another 380 tax auditors to target evasion by big business, high-wealth individuals, tax planners and tobacco sellers. From that, Labor would gain a net $150million plus from 2003-04 to pay for more social services.

Crean claimed that each $1 spent to increase tax office resources brought in another $10 in revenue, although Labor has budgeted for just a $4 return on each $1 spent. And Access Economics, which is costing Labor's proposals, had put its credibility behind that estimate.

If the return was as good as that, Costello said, why not give the tax office another $10 billion and get $40 billion back? Labor claimed in 1996 that $800 million a year could be reclaimed by cracking down on high-wealth individuals, yet the taskforce set up to do so had recouped at best $75 million.

Not only had Labor's promises spent most of what was left of the forecast budget surplus, Costello said, but it had also promised $680million of loans next year for infrastructure and aged care. Add these loans and Labor now had the budget in deficit.

But why would you add those loans? Costello does not add his own loans to the Coalition's bottom line.

Back in January, his leader promised $1 billion of new loans in a commendable initiative to offer HECS finance to post-graduate students. None of that appeared on the budget's bottom line. Nor did the $468 million loan that the government offered last month to guarantee the entitlements of Ansett workers. Nor did the $1.5billion ``loan" to the states last year that suddenly became a ``grant" on July1.

If they were included, Treasury figures indicate that next year's budget would already be in deficit. You wouldn't need Labor to put it there; Costello has done it already.

But loans are not included in the budget's bottom line; lending and spending are two different things. And who decided to leave them off the bottom line? Peter Costello.

© 2001 The Age

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