Treasury today confirmed that Labor had a $400 million hole in its policy to cut withholding tax on distributions from managed funds to non-resident investors.
Labor has consistently claimed they could halve the rate of withholding tax at a cost of $15 million a year or $105 million over three years.
On 11 May, Shadow Assistant Treasurer Chris Bowen said:
"The Treasurer's outlandish claim that Labor's proposal to cut the withholding tax in half for overseas investors in Australian managed funds will cost $100 million a year is just plain wrong. Labor's conservative costing, based on independent modelling shows a cost to government revenue of $15 million a year."
However, the Treasury has now confirmed that the initiative will cost $505 million over three years - over $175 million per year, $400 million more than Labor has allowed.
Labor got it wrong. Its tax policy has a huge hole.
Labor's final costing document confirms a range of other gaps and anomalies:
- Labor has not included any cost for the Coastguard, despite repeatedly re-committing to the policy, including in the ALP Platform (pages 180 and 214)
- No money has been included for the Department of Homeland Security.
- No money has been included for the Petrol Commissioner
- Labor claims a saving for getting rid of ‘workchoices bureaucracy' but provides no offsetting funding for Fair Work Australia
- Finance has not ticked off on the accounting treatment for Labor's $4.7 billion broadband policy - under which it is claimed that the $4.7 billion spend has no Budget impact.
- Labor has confirmed that both the Future Fund and the HAMIF will be raided to fund ALP election promises.
- The Labor Party does not include any PDI effect in its costings - confirming that Mr Swan's claims yesterday that this was an omission in Coalition costings were a complete furphy.
The Labor Party showed complete contempt for the Charter of Budget Honesty. Of Labor's 165 costing requests, only 32 were submitted after the deadline, which is why some 44 of Labor's commitments remain uncosted with the election due tomorrow.
This, along with other omissions, leaves substantial doubt about the veracity of Labor's numbers.