The Coalition’s costings today reveal it is proposing cutting foreign aid/overseas development assistance by $800 million over four years.

Australian aid is already low, by international standards and by historical standards in Australia.

The Coalition Government cut aid dramatically, and the Labor Government has been content to let it wither further.

The cuts are also a blow to the authority of Senator Dean Smith, the Coalition’s charities spokesperson.

One week ago he was asked at the National Press Club whether he could rule out cuts to foreign aid.

He demurred, pointing out that he does not have the authority to make that commitment (the charities sector employs over a million Australians, but doesn’t get a minister or shadow minister).

But he did say (at 50:00 in the Press Club video):

“I think, having made a $21 billion defence commitment like the one that’s been made [by the Liberal Party] today, it would seem counterintuitive or counterproductive to then remove foreign aid funding at a time when a vacuum is clearly emerging. … 

“Where vacuums get created in the international order, people fill them, and more often than not at the moment they are filled by our opponents.”

There you have it, in the words of the Coalition’s charities spokesperson: the Coalition’s foreign aid cuts are counterintuitive and counterproductive and will leave a vacuum for Australia’s opponents to fill.

One glorious part of the costings is where the LNP says

The Coalition will wind up Labor’s ineffective off-budget funds, including:

• The Housing Australia Future Fund;
• The Rewiring the Nation Fund; and
• The National Reconstruction Fund (and abolishing the associated National Reconstruction Fund Corporation).

The Coalition will redirect part of the balance sheet improvements from these decisions towards other priorities. These include:

• Establishing the Regional Australia Future Fund, which will be seeded with $5 billion from the Rewiring the Nation Fund.
• Creating the Critical Gas Infrastructure Fund.
• Providing equity for the construction of new nuclear power plants to replace retiring coal-fired power plants.

So the Coalition are saying they will get rid of the ALP terrible off budget funds and replaces them with… err off-budget funds

(and remember they are all administered by the Future Fund – so no fund is anymore or less effective than another.)

The campaign is rolling on, but I can not (have columns to write and walls to stare at and interviews to do).

We’ll close the blog for this evening but will be back for the last day of full campaigning in this campaign – day 35 is upon us.

Can you believe it?

I think we all know who will be sitting in the PM’s chair come the next parliament sitting – but what will the parliament look like? And who will be sitting opposite him?

All to be revealed very soon, so please stick with us!

Have a lovely evening and hopefully some switch off time. We will be back with you early tomorrow, but until then – take care of you. Ax

Matt Grudnoff and Jack Thrower

1. Uni graduates pay more in HECS than the gas industry pays in PPRT

University used to be free but is now more expensive than ever. After graduating with an arts degree a young Australian will now repay the government around $50,000.

Meanwhile, Australia is one of the world’s largest gas exporters, but multinational gas corporations pay almost nothing for Australia’s gas. Uni graduates now pay back much more in student debt (HECS/HELP) repayments than the gas industry pays in Petroleum Resource Rent Tax (PRRT). In 2023-24 Australians paid more than 4 times on HECS/HELP than gas companies did on PRRT.

2. It’s almost impossible to save for a house deposit.

House prices are growing quicker than wages, so the amount a deposit costs has grown faster than most young workers can save. Our Chief Economist Greg Jericho has worked out that for most people, if you started saving for a house 10 years ago, you are now further from having a home deposit than when you started.

He found that in 2014, you needed $154,600 for an average Sydney house deposit. By 2024, an average deposit is over $280,000, meaning that even if you managed to save $126,000 over ten years, you need another $155,404!

3. Younger people pay more tax on the same income than older people

The amount of tax you pay is mainly based on your income. But there are a number of ways that older people end up paying less tax on the same amount of income.

The first is that younger people are more likely than older people to have a HECS/HELP debt. This debt is taken out of their pay at the same time as income tax. That is, it comes out before it arrives in their account. While this is technically a repayment of debt and not tax, for the person making the repayment it acts and feels exactly like paying extra tax.

This comes on top of the fact that most older people paid less for their higher education than younger people. This includes people who went to university when it when it was free from 1974 till 1989.

Older people also get more benefit from tax concessions. Tax concessions are tax loopholes that allow taxpayers to pay less than the full rate of tax. The Federal Government gives many Australians tax breaks, also known as tax concessions. Included are details about some tax concessions that are based on age – these are worth $105 billion per year.¹ It shows that people 65 years and older get $27 billion, or 25% of these tax concessions. People under the age of 30 get $6.5 billion, or 6% of these tax concessions.

Older people get a much larger benefit from these tax concessions because most of their benefit goes to the rich, and older people are on average more wealthy than younger people. The result of this is that older people are able to use these tax concessions to reduce the tax they pay considerably more than younger people.

4. Young people are forced to buy private health insurance to help make it cheaper for older people to get medical treatment

Private health insurance is directly subsided by the government – it cost the Commonwealth $7.6 billion in 2024-25. But the Commonwealth subsidises private health insurance in another way that benefits older people at the expense of younger people.

If people who earn more than $93,000 per year fail to take out private health insurance, the Commonwealth government charges them the Medicare levy surcharge, which is a higher rate of income tax that costs more than a basic private health insurance policy. The effect is that young people who earn more than $93,000 per year are forced to buy private health insurance.

On average, young people are less likely to actually use private health insurance than older people. This means that private health insurance companies pay out far less on claims for young people, and far more on older people. Without the Medicare levy surcharge many young people would choose not to buy health insurance. Losing these highly profitable younger people would mean that private health insurance companies would need to put up premiums on older people. The younger customers pay for the older ones.

The result is that younger people earning more than $93,000 per year are effectively subsidising older people’s private health insurance.

5. Same job, less pay

Even after a young person turns 18 and becomes an adult, legally allowed to vote, drink, smoke, serve on a jury and be deployed to fight in a war, they can still be paid less than other adults.

Australia’s industrial relations system mandates minimum wages across the economy, many of which allow for ‘junior rates’ that mean staff under 21 years old can be paid less than older workers.

Junior rates are often defined as a percentage of the ‘full’ minimum wage. For instance, under the National Minimum Wage, an 18-year-old employee can be paid just two-thirds (68.3%) of what someone aged 21 or over is entitled to. Workers under the age of 18 are also not guaranteed superannuation contributions unless they work 30 hours a week. Almost 9 in 10 workers under the age of 18 (87%) are on junior rates, and about one in three young adult workers (34% of 18-20-year-olds) are on junior rates.

Other countries have moved away from junior rates and towards directly experience-based criteria. For example, in New Zealand, 16- to 19-year-old workers can be paid a ‘starting-out’ minimum wage if they do not yet have six months experience with a single employer. This means that workers are paid according to their ability, not their age. Proponents of junior rates argue that lower pay is necessary to encourage employers to hire younger workers. But over the past decade New Zealand has had broadly similar levels of youth unemployment as Australia, which suggests that junior rates do not lead to higher levels of youth employment.

Power in numbers

This election, Millennials and Gen Z voters will make up 47% of the electorate, which makes them the single largest voting bloc. But young people are being let down by timid governments that are unwilling to make policy changes that would improve their lives. Young people need real action on housing, real action to lower the cost of tertiary education, real taxation reform, and real action on climate change. If Australian governments are unwilling to make these changes, then what incentive do young people have to vote for them?

¹ The tax concessions used are superannuation contributions, superannuation earnings, capital gains tax discount, senior and pensioner tax offset, cost of managing tax affairs, franking credits, Medicare levy low-income threshold, individual deductions for gifts and donations, work-related expenses, and tax benefit of rental deductions.

You just know the Labor campaign have had this lined up for weeks now

We just did some numbers using APS employment data:

Let’s assume it’s true that all these jobs will be in Canberra ACT. There were only 69,438 APS jobs in Canberra in Dec 2024. (Not 110,000 like Hume said)

Now let’s exclude:

• Frontline services
  • Services Australia
  • ATO
  • Dept of Veteran’s Affair
• National Security
  • Defence
  • Home Affairs
  • Australian Criminal Intelligence Commission
  • Office of National Intelligence
  • Australian Submarine Agency
  • Defence Housing Australia
  • Office of the Inspector-General of Intelligence and Security

This leaves 46,293 jobs, so the Coalition costing assumes that nearly 90% (88.6%) of Canberra’s APS will resign over five years.

What if the Dept of Health counts as frontline? Now we’re assuming 99.2% of people quit.

What if the War Memorial is protected (375 people) now we’re guessing that over 100% of people resigned.

Frank Yuan and Joshua Black

Over two consecutive days, independent MP Monique Ryan and Labor’s housing minister Clare O’Neil faced questions about the support of the Hubei Association for their respective campaigns. As was pointed out yesterday, neither campaign ultimately took up the assistance offered by the Association.

The issue came up in during a regular segment featuring Liberal campaign spokesperson Jane Hume and O’Neil herself on the Seven network. Hume remarked to the minister that there “might be Chinese spies handing out” her how-to-vote cards, but the Liberals had “dozens, thousands, hundreds of young people” on the hustings.

The campaign, which appears to have run out of intellectual material, seems to be resorting to a back catalogue of redbaiting and dog-whistling from Cold War electioneering. But the history of fearmongering about foreign interference in Australian elections runs deeper.

Australia’s first “redbaiting” election was in 1925. The Community Party of Australia had just “a few hundred members”, but that didn’t stop the PM, Stanley Melbourne Bruce, from conflating global communist activism with domestic industrial disputes.

Hardly a centenary worth celebrating.

The poisoning of public debate had grim consequences. Bruce’s redbaiting cemented a political culture where it became impossible to question Australia’s defence policy centred around the British imperial presence in Asia. The Labor party had already been branded as disloyal to the country and to the empire thanks to its opposition to conscription during the Great War. Now the conservatives were tying themselves to a declining imperial power, whose defeat in Singapore in 1942 was as predictable as it was tragic – not just for the POWs but for the civilian populations caught up in Japan’s imperial push into Asia.

Despite that deep history, the redbaiting on display in the recent past has been astonishingly inept. At the last election, Scott Morrison repeatedly claimed that the Chinese Communist Party preferred Anthony Albanese. He also described Labor’s deputy Richard Marles as the “Manchurian candidate”.

It wasn’t just Morrison. At the same election, right-wing campaign outfit Advance Australia ran billboards and truck-side ads depicting Chinese president Xi Jinping casting a vote for Labor.

But Jane Hume’s comments represent a new threshold in the cynicism and hollowness of redbaiting in Australia’s elections. Indeed, just minutes later, Hume and O’Neil were singing one another’s “sense of style” and promised to “have a cocktail” with each other after the campaign. Who cares about those Chinese Australians who served as a stand-in target for the politicking?

It is perhaps reassuring that neither candidate seriously believes that those Chinese Australians were spies, but invoking the threat of foreign interference so flippantly does real damage to the social cohesion about which both major parties dissemble. All Australians deserve better than this kind of ritualistic malice.

I can now see why the Coalition didn’t want to publish these costings until the very last minute.

There are all kinds of craziness in there. But my initial thoughts are:

They are planning to save $17.3 billion from sacking… sorry… the natural attrition of public servants only from Canberra and not from front line positions or national security or home affairs . This has as much chance of being delivered on time and on budget as their nuclear plan. At some point the Coalition will either start sacking people from across the country and from front line services, or they will give up on ever getting close to a $17 billion amount.

If they can’t save anything like $17 billion then their claims to improve the budget bottom line by $14 billion will go up in smoke.

Other interesting things from a first quick look:

They’re planning to cut foreign aid by $814 million. The last time the Coalition did this it destroyed our reputation across the region which required extensive work and time to repair.

They want to raise another $3.1 billion from foreign students in additional visa application charges, while also planning big cuts to migration.

At a time when the economic, workforce participation, and child development benefits of early childhood education and care are well known, they’re planning to save $308 million by reintroducing the childcare activity test.

In that press conference Hume was asked about the number of Canberra public servants and said:

There was around 110,000 or so in the middle of 2024. In 2024, before the majority of the increase has occurred. There was around 110,000 public servants in Canberra.

So that is the figure they are using to justify cutting all 41,000 public servants from Canberra.

But the problem is, she is wrong. Because the actual number of public servants is about 68,000. The number that Hume is using includes ALL government employees – so that is defence, Australia Post, the ABC etc.

So unless the Coalition is going to cut ADF personnel, then Hume is wrong.

Just had a very quick meeting with the economists here who are all walking around with the Coalition costings document looking like Amelia Harmer in a pub.

We’ll bring you the main takeaways in spending/saving very soon