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Treasury backs Labor's tax costings
The federal Treasury has backed the costings of the main plank of Labor's tax package, contradicting a claim by the Treasurer, Peter Costello, that the Opposition's plan had a $700 million error.
Mr Costello said earlier in the campaign that he was prepared to stake his economic credibility on his claim to have found a $700 million "black hole" in the way Labor had accounted for the low income tax offset that it proposes to replace with its working tax bonus. The bonus would deliver an $8 a week tax cut to those earning less than $52,000.
But the Treasury costings of Labor's policy has contradicted Mr Costello's calculations.
A spokesman for the shadow Treasurer, Simon Crean, said last night that Treasury had vindicated Labor's economic caution and put the spotlight on Mr Costello's economic credibility.
"Peter Costello's big lie has been exposed by Treasury just in time for the people to decide," he said.
Labor said its working tax bonus and tax threshold increase for the top marginal rate would cost $2.6 billion in 2005-06, rising to $2.7 billion in the next two financial years.
Treasury estimated the cost to be about $2.5 billion a year - even less than Labor's estimate.
Mr Costello told ABC Radio on September 23 that he would stake his economic reputation on the claim to have found the $700 million shortfall.
Labor's finance spokesman, Bob McMullan, said the Treasury report damaged Mr Costello's credibility. "The Treasurer put his economic credibility on the fact there is a $700 million hole, and Treasury have said he is totally wrong. They have said not only is his arithmetic wrong, his whole conceptualisation of the issue is wrong. He must be humiliated."
Mr McMullan said Mr Costello's mistake showed what happened "when he doesn't have the Treasury department to hold his hand".
The federal Treasury has backed the costings of the main plank of Labor's tax package, contradicting a claim by the Treasurer, Peter Costello, that the Opposition's plan had a $700 million error.
Mr Costello said earlier in the campaign that he was prepared to stake his economic credibility on his claim to have found a $700 million "black hole" in the way Labor had accounted for the low income tax offset that it proposes to replace with its working tax bonus. The bonus would deliver an $8 a week tax cut to those earning less than $52,000.
But the Treasury costings of Labor's policy has contradicted Mr Costello's calculations.
A spokesman for the shadow Treasurer, Simon Crean, said last night that Treasury had vindicated Labor's economic caution and put the spotlight on Mr Costello's economic credibility.
"Peter Costello's big lie has been exposed by Treasury just in time for the people to decide," he said.
Labor said its working tax bonus and tax threshold increase for the top marginal rate would cost $2.6 billion in 2005-06, rising to $2.7 billion in the next two financial years.
Treasury estimated the cost to be about $2.5 billion a year - even less than Labor's estimate.
Mr Costello told ABC Radio on September 23 that he would stake his economic reputation on the claim to have found the $700 million shortfall.
Labor's finance spokesman, Bob McMullan, said the Treasury report damaged Mr Costello's credibility. "The Treasurer put his economic credibility on the fact there is a $700 million hole, and Treasury have said he is totally wrong. They have said not only is his arithmetic wrong, his whole conceptualisation of the issue is wrong. He must be humiliated."
Mr McMullan said Mr Costello's mistake showed what happened "when he doesn't have the Treasury department to hold his hand".

